Family Law: Dividing Family Property When You Separate
When building a life together with your partner, you have every hope and intention of staying together. But if the relationship dissolves, there is the question of how to divide the property that has been accumulated over your time together and what each partner has a right to claim.
According to family law in British Columbia, married couples and those who have been together in a marriage-like relationship for two or more years are bound by the same rules when it comes to the division of property, all of which will fall into one of two categories: Family Property or Excluded Property.
Family Property includes everything that is acquired by you and your partner during your relationship, whether separately or together, on the date that you separate. It doesn’t matter whose name the property is in. Unless you have a previous agreement that specifies otherwise, all family property is divided equally between both parties. It includes:
- Your family home
- Bank Accounts
- Business Interests
- Insurance Policies
- The increase in value of excluded property, from the time of the relationship’s beginning
Excluded property includes those items that do not fall within the domain of family property and are therefore exempt from the rule stipulating their equal division. Items classified as excluded property include:
- Any property owned by one partner before the start of the relationship
- Inheritances and gifts given to just one partner during the relationship
- Certain types of damage awards, insurance proceeds, and trust property
Remember, however, that if the value of the excluded property increases during the relationship, the amount of the increase is deemed to be family property and is subject to the rule of equal division.
One common example is when one partner owns their own house, which becomes the shared home of the couple during the relationship. If the home was originally worth $300,00 when the relationship formed, but is valued at $450,000 when the couple splits, only the increase of $150,000 is subject to division, while $300,000 remains the property of the original owner.
Of course, the couple is free to make a different agreement should they wish to divide their property differently.
There are also some cases where the property may be divided unequally, such as when a court determines that dividing it equally would be “significantly unfair.” While this will not occur in most cases, the court may, upon reviewing several deciding factors, decide that the property be divided unequally.
Separation after a lengthy relationship is always difficult, but if there is no existing agreement for the division of property, rules are in place to encourage a fair settlement for both parties.