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Asset Division:  What to do when the one you loved, loves your assets?

In family law matters asset division is usually a total concern for people who are separating from their spouses. 

Which assets are considered joint assets and which are not?

Family assets, now defined as family property, are defined under s. 84 of the Family Law Act of BC as real and personal property owned by at least one of the spouses. Such family assets include:

  • the family residence
  • a spouse's entitlement under an annuity, a pension, a retirement savings plan or an income plan.
  • a share or an interest in a corporation;
  • an interest in a partnership, an association, an organization, a business or a venture;
  • property owing to a spouse as a refund, including an income tax refund;
  • property owing to a spouse in return for the provision of a good or service;
  • money of a spouse in an account with a financial institution

What is not included as a family asset is referred to as excluded property and includes:

  • property acquired by a spouse before the relationship between the spouses began;
  • gifts or inheritances to a spouse;
  • 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 or lost income of a spouse;
  • money paid or payable under an insurance policy, other than a policy respecting property.

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Asset Division for Separating Spouses is About Answering the Following Questions:

  • What percentage of our money, real estate, and investments will each of us get?
  • What if I brought in most of the assets and we have only been together a short time?
  • Is asset division always equal?
  • What if we have debt, does that get divided too?
  • I bought most of the furniture, kitchen stuff, and appliances, can I keep them all as I paid for them in the first place?

What Percentage of Our Money, Real Estate, and Investments Will Each of Us Get?

In the olden days (like, prior to March 18, 2013 when the new Family Law Act) came into effect) there was a presumption that each party was entitled to 50% of the assets of the parties in the relationship regardless whose name the assets were in or who paid for them in the first place. If someone wanted to dispute that amount because, let’s say they brought in the majority of the assets and the relationship was a relatively short one, the onus was on that person to prove that an unequal division was fair.

This treatment of asset division according to the old law could be potentially really unfair in certain circumstances. Imagine Jennifer, a person who brings a clear title $750,000 home into her relationship with Justin. Justin and Jennifer’s relationship only lasts 5 years. Then the value of the house Jennifer brought in to the relationship is exposed to being divided equally with Jason. This resulted, at times, as a windfall to Jason, who in this case, did not bring much in the way of assets into a relationship.

Now that the Family Law Act has come into effect, the law is way better and much more fair. Now what happens is that Jennifer is able to keep the value of what she brought into the relationship. So, the $750,000 value of the house would not be exposed. If the value of the house increased in value during the course of Jennifer and Jason’s relationship, however, the increased value would be divided between them equally.

 “Phew”

Nowadays, thanks to the new Family Law Act, you get to keep what you brought into the relationship. Any assets that grew during the course of your relationship you would share. At least you get to keep what you brought in. 

Is Asset Division Always Equal?

Asset division is mostly always equal once we first take out any assets that are excluded from division (that being what you brought into the relationship). 

What if We Have Debt? Does That Get Divided Too?

Under the new Family Law Act legislation, yes, debt can be divided as well. It is not only asset division that counts in the new legislation, but debt as well.  Somebody cannot just leave their spouse with a pile of debt. There is a provision that family debt is to be shared in the same way that family assets are (of course the debt being on the more depressing side of the ledger).

What Happens If I Bought Most of the Furniture, Kitchen Stuff and Appliances?

If you purchased assets during the relationship they are subject to equal division. Yet often you can negotiate keeping items that you purchased when traded off something else. Another thing to think about is that when we are talking about personal possessions (things like furniture and appliances) they tend to be only worth a fraction of what you paid for them once used. So, it is often not even worth it to get into any significant disputes over such items. 

At Hemminger Law Group Westshore we often encourage our clients to let this kind of stuff go. Spending money on legal fees arguing about personal possessions can be expensive and result in a negative return. For example, by the time you pay for legal fees to argue over a set of dishes, you may have been better to buy yourself a new set of dishes. 

By Val Hemminger, Lawyer at Hemminger Law Group Westshore