Matrimonial Property Division
Matrimonial Property Act vs. Divorce Act
The Matrimonial Property Act of Alberta sets out specific guidelines with regard to the division of property of a legally married husband and wife whose marriage has broken down and who cannot agree on the division of their assets. The Act does not apply to common-law spouses. However, the incoming Family Property Act is scheduled to come into effect on January 1, 2020, which aims to set some guidelines for property division for common-law couples.
The federal Divorce Act applies to married couples who have separated and are seeking a divorce. The Divorce Act also deals with custody and parenting arrangements and child and spousal support in the context of a divorce.
Factors Affecting Property Division
If you are a married couple going through divorce, the Court may consider some of the following factors:
What each spouse contributed in the marriage,
The financial situation of both spouses,
Any agreements made by the parties,
Duration of marriage,
Whether there are existing Court Orders,
If a spouse incurs a tax liability when transferring a home or selling it.
Matrimonial Property and Exempt Property
Matrimonial property consists of all assets and debts accumulated by either or both spouses during the duration of the marriage, including anything acquired after the date of separation. This may include property, vehicles, credit cards and household goods. The value of the matrimonial property is split evenly between the two parties, unless this would be unfair to one party.
Exempt property are assets or debts acquired by one party before the marriage, or received as a gift, inheritance or settlement (insurance payouts, awards for damages) from a third party during the marriage. As the name implies, these items are exempt from division, so long as they are demonstrably the property of one person. However, issues may arise when the proceeds of an exempt property are mixed with other funds towards the acquisition of a new property. The claimant of the exempt property bears the onus of proving the exempt status of the property.
Other Property Issues
Matrimonial property division can be complicated further when the parties cannot agree to the value of certain properties; or if there are properties overseas; or if the other partner refuses to disclose the whereabouts or value of the property. Furthermore, the existence of any contract or agreement made between the parties such as a prenuptial contract or cohabitation agreement may bar a party from making property claims against the other.
Settling Property Disputes Out of Court
Settling out of court can provide a number of advantages over litigating a case through to the (often bitter) end. One of the main benefits of settling outside of court are minimizing litigation costs. Parties may also contract out of the Matrimonial Property Act in order to split assets upon what they consider to be fair and reasonable. Settlements are also faster and respected by the parties as this is a more positive way to end the relationship. If you and your spouse wish to resolve property issues out of court, consider calling one of our lawyers to draft you a separation agreement.
Minimizing Property Disputes
One can minimize disputes over matrimonial property even before they start by considering agreements such a prenuptial or a cohabitation agreement. Such proactive measures taken before starting a relationship or while in a relationship gives parties a more predictable settlement if the relationship dissolves in the future.
Our experienced family law lawyers can advise you properly in matrimonial property disputes to help you maximize your settlement. Many of the contracts mentioned above can be drafted on a flat-rate basis depending on your situation.