Family Property & Debt Division
Fair outcomes on the financial side of separation.
The Family Law Act governs how property and debt are divided in BC. The rules apply to married spouses and to unmarried spouses who have lived together in a marriage-like relationship for at least two years.
Family Law Act
The Family Law Act of British Columbia is the provincial legislation that governs the division of property in British Columbia. The property division scheme under the Family Law Act applies to married spouses and unmarried spouses who are cohabiting in a marriage-like relationship for at least two years (sections 3 and 81). Spouses in either of these two categories may apply to court for a division of property. Applications for property relief under the Family Law Act must be made in the Supreme Court of British Columbia, not the Provincial Court.
Family Property
Family property is defined in section 84 of the Family Law Act as the real and personal property that one or both spouses own during their relationship and before separation. Examples include the family home, RRSPs, pensions, bank accounts, investments, insurance policies, and shares or interests in a corporation. Generally, each spouse is entitled to one half of family property.
Excluded Property
Excluded property is defined in section 85 of the Family Law Act. Examples include property acquired by one spouse before the relationship began, inheritances and gifts to one spouse, insurance proceeds, settlements or awards of damages, and certain trust property. There are exceptions: the increase in value of excluded property during the relationship is divisible, and property acquired after separation can still be considered family property if it was acquired by using family property or its proceeds.
Family Debt
As with family property, debts that either or both spouses incurred during the relationship are divided equally between them. After separation, spouses are responsible for their own new debt — but family debt incurred by one spouse after separation is still divided equally if it was incurred to maintain family property. Family debt is dealt with in section 86 of the Family Law Act.
Valuation
The valuation of family property and debt is determined either at the date of an agreement dividing them, or at the hearing before the court. Both parties may be subject to fair-market increases or decreases in property values until the agreement is signed or the trial begins. Section 87 of the Family Law Act provides the legal basis for valuation.
Temporary Orders
Before a final determination is made on the issues arising from separation, the court — under section 89 of the Family Law Act — can make an order for interim (temporary) distribution of family property to fund the resolution of a dispute, such as legal fees, alternative dispute resolution fees, accountants, or business valuators. Under section 90, the court can grant a spouse exclusive occupancy of the family residence and possession of personal property there. Under section 91, a spouse can apply for an order restraining the other from disposing of any property before a final determination.
Time Limits
There are important limitation periods. Married spouses must bring an application for property relief within two years of the date of divorce or a declaration of nullity (s. 198(2)(a)). Unmarried spouses must apply within two years of the date of separation (s. 198(2)(b)). Contact us so we can discuss these timelines and take immediate steps to preserve your property claims.