Property Division After A Marriage

Alberta legislation, the Family Property Act, governs the division of assets and debts of a marriage after separation.  It creates a legal regime of common property that in many ways ignores legal title in the context of the marriage, on the basis that marriage is also an important financial partnership. The legislation describes the default rules for property division and also permits, under strict conditions, for people to modify or even opt-out of those rules by written agreement.  Such agreements can be made before (a Prenuptial Agreement), during (Marriage Agreement) or after (Separation Agreement) a marriage.

Broadly speaking, the legislation deals with three categories of property:

• Firstly, property acquired by either spouse during the marriage is divided equally by default
• Secondly, some property can be “exempt property” and so stay with only one spouse
• Thirdly, some exempt property (if there is any) may have gone up in value during the marriage, and that increased value will be divided according to what is fair in the circumstances

In the vast majority of situations, the division of marital property is negotiated and confirmed in a written agreement or by order. A deep understanding of the law enables appropriate, timely and fair negotiations. Competent advice from experienced counsel can make a profoundly positive difference in outcomes, which can have long-term financial consequences after a separation.

Property Division for Unmarried Persons

The new Alberta Family Property Act came into effect on January 1, 2020.  The new Act amends and renames the former Matrimonial Property Act, which had before January only applied to married people. The new legislation now also applies to people who are "Adult Interdependent Partners", which is a legal term defined by the Adult Interdependent Relationships Act of Alberta.  This is a very important change to family property law in Alberta.  Now, if unmarried people separate in 2020 or later, and if their relationship meets the requirements in the legislation to qualify, they will be subject to the default property division rules in the Act.  This will, for those people, allow for more clarity and certainty in the division of the property of their relationship.  Their property would be divided in the same way as the property of married persons.  There would still be a small sub-set of unmarried couples whose relationship may have been too short to qualify under the new legislation.  In that now much smaller group of situations, the Family Property Act would not apply. Instead, judge-made law would still apply, and the parties would need to prove that they contributed in some way directly or indirectly to the property owned by their unmarried spouse, enriching them without receiving fair compensation in return. 

In Summary:

The following changes came into force on January 1, 2020:

• renamed the Matrimonial Property Act to the Family Property Act
• amended the Act to apply to both adult interdependent partners as well as married spouses
• allows partners to draft their own property division agreement rather than following the rules in the legislation, if drafted in compliance with sections 37 and 38 of the Act
• specifies that the legislative property division rules will apply to any property acquired during an interdependent relationship, this includes adult interdependent partners and married couples who lived together prior to marrying each other
• gives each adult interdependent partner 2 years from the date they knew (or should have known) an adult interdependent partnership ended to make a claim for property division under the Act (2 year limitation period)
• clarifies that partners can enter into a property ownership and division agreement that applies both during cohabitation (while living together before marriage in a relationship of interdependence) and during their marriage
• property agreements made during cohabitation would not apply after marriage unless the clear intention in the agreement includes that it would continue in effect after the marriage
• existing property division agreements that were enforceable under the law when they were signed (before the new Act) would still be enforceable.