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Married and Unmarried Property Division

 

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Property Division After A Marriage

Alberta legislation, the Matrimonial 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 circumstance

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.

Common-Law Property Division

Although legislative reforms are being actively worked on, currently, no legislation exists in Alberta governing the division of property of an un-married couple. Instead, complex Judge-made law applies, built up from a large body of Court decisions written over decades. Unlike for married couples, the Courts do not start with a presumption that any property acquired during an un-married relationship will be divided equally after separation. Instead, if a partner makes a claim against the property owned by their spouse at separation, they must prove they contributed in some way directly or indirectly to that property, but were not fairly compensated for their contribution (unjust enrichment). Contributions can be financial, personal, involve time and labour, or involve the parties’ roles and intentions in their relationship and in the raising of their children.

Court decisions have increasingly recognized that unmarried persons can be engaged in a “joint family venture”, where their intentions have been to build assets together and share in the financial rewards of their relationship, quite similar to the basic concept underlying the Matrimonial Property Act. However, the legal concept of a “joint family venture” is still based in the idea of proving that a person’s contributions to property made during the relationship have gone uncompensated, and that it would be unjust for one partner to come out of the relationship financially better off than the other as a result.

Because of the state of the law, common law property division in Alberta is very fact-specific and based on the parties’ particular circumstances. There is a large amount of discretion with the Courts to listen to the circumstances of the parties and their history, and then decide how most fairly to deal with their competing claims to each other’s property. Until Alberta law in this area is reformed through legislation, the division of property for unmarried people will continue to be very challenging. Leamy Family Law have extensive experience in the legal principles underlying common-law property division. We will discuss your particular circumstances and educate you on the extent of your potential claim, then develop a plan to achieve your goals so you can move on with your life. 

* December 2018 Update * 

Bill 28: the Family Statutes Amendment Act was passed on December 4, 2018 to:

  • make it easier for unmarried partners to divide their property if they break up

Property division changes:

Currently, there is no government legislation in Alberta that indicates how to divide property when an unmarried couple breaks up, resulting in uncertainty and costly legal battles.

Bill 28 updates the Matrimonial Property Act to make it easier for unmarried partners to divide their property if their relationship breaks down.

The following changes will come into force on January 1, 2020:

  • rename the Matrimonial Property Act to the Family Property Act
  • amend the act to apply to both adult interdependent partners as well as spouses
  • allow partners to draft their own property division agreement rather than following the rules in the legislation
  • specify that property division rules will apply to any property acquired after beginning an interdependent relationship, this includes adults interdependent partners and married couples who lived together prior to marrying each other
  • give 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
  • clarify that partners can enter into a property ownership and division agreement that applies both during cohabitation (living together before marriage) and the time after marriage
  • agreements made during cohabitation would not apply after marriage unless that is the clear intention

Existing property division agreements that were enforceable under the law when they were signed would still be enforceable when the new legislation comes into force.
* source: https://www.alberta.ca/family-law-changes.aspx 

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