Dividing assets and debts during a Surrey divorce causes many of our clients a great deal of anxiety. While everyone knows that a divorce changes one’s life and finances, popular media has done a great deal to instill the fear that any given divorcee stands to lose everything by the time the dust settles.
Fortunately, Canadian family law strives to be fair to both parties. This does not mean that the division of assets will ever be simple. A number of issues and negotiable points will always be part of the process.
How can we help? Our team helps you protect the value of your most important assets, helps you negotiate control of the assets you most want to keep, exempt as many non-marital assets as possible, and helps you to negotiate a workable settlement. We also help you understand how the courts will see your asset profile, allowing us to offer an advantageous and realistic series of legal solutions as we negotiate your settlement.
Defining Marital Assets
In British Columbia, both spouses have a 50% right to the marital property. Marital property is defined as all the property that was accumulated over the course of the marriage, from the date of the wedding to the date of the divorce. If you are a common law couple, the accumulation of property spreads from the moment you became adult interdependent partners to the moment you separate.
The law is fairly indifferent to the way both parties acted during the course of your marriage unless that behavior did something to significantly devalue the assets or increase the debts. Family law judges have no interest, for example, in using the division of assets to “punish” one party for having an affair. They only care about dividing up the property as evenly as possible.
Defining Excluded Property
“Excluded” or “non-marital” property is property that you owned before you got married. It includes:
- Property owned prior to the date of marriage.
- Inheritances
- Gifts from people other than your spouse
- Personal injury settlements
- Insurance payments
- Trust funds held by a party other than your spouse
Defining excluded property isn’t always straightforward. First, the exclusion only applies to the base value of the property brought into the marriage, not the value accumulated through the course of your marriage. If you started with a $10,000 retirement account then the $10,000 is excluded; the $80,000 the account earned over the course of your marriage may still be considered marital property.
In addition, certain actions can co-mingle marital property with non-marital property, or can even convert non-marital property into marital property. For example, if you took your inheritance and used it to buy a family home then the family home is still marital property, regardless of where the down payment came from. If you took an asset and put it into your spouse’s name, it might well be seen as a “gift” to your spouse, which could then convert it into marital property. A great many of the struggles that can arise during a divorce can arise over what property can fairly be called exempt.
Second, you are required to trace the origins of that property in order to successfully exempt it. You may need to provide deeds, purchase receipts, bank records, or other proof to show that the property should be exempted. Gathering sufficient evidence is not always easy. We work closely with you to make as strong a case for exemption as possible wherever doing so would be applicable and legally feasible.
Protecting Asset Value
Few divorces are as simple as selling off all the assets and then writing each party a check for half of the proceeds. Many assets can become devalued if they are handled incorrectly during the divorce.
Assets that can become devalued include:
- Real property
- Investment accounts
- Farms
- Businesses
Many of these assets also have variable value, which means getting a certified valuation professional involved will be vital. And because many of these assets create income, retaining control of them could mean offering equalization payments or a greater share of other assets. Ensuring the division of property is actually advantageous is an ongoing challenge.
Fortunately, all of our divorce attorneys have a background in both business law and real estate law. This ensures that we can help you craft sophisticated solutions that will protect the value and future earning potential of your most important assets. We can also help you protect control over assets that matter to you a great deal, such as the business you built from the ground up.
Fair Splits
While both spouses begin with the benefit of a presumption that they have a right to 50% of the assets, the courts do recognize that there are times when such a split would be fundamentally unfair.
These include times when:
- A spouse causes a significant increase or decrease in the value of property after the date of separation.
- A spouse attempts to hide assets during the divorce process.
- The spouse spent a significant portion of the assets during the course of the marriage, or ran up a significant portion of debts, without their partner’s knowledge or consent. An example might be a spouse who ran up significant gambling debts behind their partner’s back.
- The course of the marriage was very short, to the point where a spouse might unfairly benefit from a significant market-based increase of an asset brought into the marriage, such as a house.
- There is significant debt, and one spouse would be unfairly disadvantaged by being asked to take on a significant portion of that debt.
Property division is negotiable, and we can often bring up these issues of fairness during the settlement process long before a court is forced to rule on them or make decisions on them. In cases that you’ve heard about where one spouse walks away with a greater share of the assets some of these issues were likely to be in play. Ask us about them if you’re worried about them.
Get Help Today
Worried about your assets? Our experienced legal team will help you get a fair deal, even if your asset profile is complex.
Call 1-604-394-7777 to schedule your first appointment today.