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A Basic Primer on the Division of Family Property

The division of Family Property in British Columbia is governed by the Family Law Act. The framework is the same for common-law couples (i.e., have lived together in a marriage-like relationship at least 2 years) and married couples. 

 

Step 1: Determine if there are any limitation periods that could bar your claim

Your claim for a division of Family Property order must be made no later than 2 years following separation or divorce.

If you're applying to set aside an agreement with respect to property division, you must make your claim no later than 2 years from when you first discovered or reasonably ought to have discovered the grounds for making your claim. 

 

Step 2: Determine what is "included" or "excluded" Family Property

The Family Law Act  has simplified the division of property scheme when compared to the previous scheme under the Family Relations Act. The analysis no longer considers whether the property in dispute was used for a "family purpose".

Instead, all property that was acquired after the date of marriage or after 2 years of being in a marriage-like relationship will be considered "included" Family Property. There are exceptions to his rule which include: whether the property was received as an inheritance, as a settlement for damages for injury, and whether the property is held in trust. If the property falls within an exception, then it is considered "excluded" Family Property. 

Property that is not considered "included" Family Property will be considered "excluded" Family Property. 

It is important to determine whether Family Property is "included" or "excluded" because, in general, only "included" Family Property is presumptively divided between the parties equally (i.e., 50 / 50). In general, only the accretion in value of the "excluded" property during the marital relationship will be divided between the parties. 

There are, of course, exceptions to these general rules. Of note is that there are special rules governing the division of the "Family Residence" (i.e., the family home, the matrimonial home). 

It is also important to note that Family Property includes debt. Any debt incurred following the date of separation but incurred to maintain Family Property is considered "included" Family Property. 

As noted earlier, "included" Family Property is presumptively divided equally between the parties. However, the Family Law Act contains provisions to permit the court to divide "included" Family Property unequally. A "legal presumption" is a term of art and will not be discussed in this post.

 

Step 3: Value the Family Property

In general, the value of the Family Property will be based on its fair market value at the time of the hearing. 

If you are using a separation agreement, then the value of the Family Property will be based on its fair market value at the time of the entering of the agreement. 

If you and your ex cannot agree on the value of the property, then you will need to hire appraisers to value the property. Appraisers are usually required to value pensions, companies, and real estate. 

 

Step 4: Determine if the law of trusts applies

If you do not have a claim to Family Property under the Family Law Act, you might still have a claim under the law of trusts. The law of trusts is complicated and will not be covered in this post.

The most-common types of trust claims made in the family law context are those claimed as a "resulting trust" or a "constructive trust". 

 

In closing, the division of Family Property is complicated and it is strongly advised that you receive independent legal advice before signing any agreements or agreeing to any consent orders.
Written by
Mark J. Chiu
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