Generally speaking, in BC, spouses – married or common law – have a 50/50 entitlement to each other’s assets and property. On the flipside, this 50/50 entitlement also extends to debt regardless of whether your name is on that debt or not, so long as it was incurred during the course of the relationship/marriage!
The above, is the general rule. As in the case of most rules, there are several exceptions. The Family Law Act differentiates between family property and excluded property. Family property is the above – 50/50 entitlement. Excluded property is property that at the end of a relationship/marriage, is not 50/50 divisible.
So what is excluded property? Well, section 85 of the Family Law Act includes a list of the types of property which fall into this exception, including but not limited to:
– property acquired by a spouse before the relationship between the spouses began;
– inheritances to a spouse;
– gifts to a spouse from a third party;
– a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for loss to both spouses, or lost income of a spouse;
– money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for loss to both spouses, or lost income of a spouse; and
– certain types of trust funds.
I must add, even if your property or assets fall within the excluded property regime, your ex is entitled to 50 % of the increase in value of the excluded property. Also, even if your property falls within section 85, you have the obligation to prove it. If you spent that inheritance on a family trip, or that gift from aunt Peggy on – well you can’t remember – then you are probably out of luck. The excluded property can only be excluded if you can actually trace it to an asset existing today.
The Family Law Act is fairly new and courts are continuing to interpret its provisions daily. These matters are quite technical and require serious attention. If these matters are left unaddressed, you may lose out on some real cash. Give us a call today to get some more information. Don’t exclude yourself, exclude your property!
Aman Oberoi, Associate Counsel