What is Family Property?

So you’ve gotten married, and things may already be on the brink, or it has ended poorly and you may be worrying about what is yours should you need to split up? 

The concept of family property is perhaps a bit strange but it is essential for you to know what you have a right to. This quick article hopes to dispel your concerns, as well as provide a simple checklist for you to know what you are legally entitled to. 

To start, the right to family property is helpfully defined in the Family Law Act: 

Section 81  Subject to an agreement or order that provides otherwise and except as set out in this Part and Part 6 [Pension Division],

(a) spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution, and

(b) on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt.

It is important to remember, it is not only assets (things with a positive financial value such as property or cars) that are to be divided – it is also debts. The harsh way to think of this is any negative financial value such as loans or other financial encumbrances you and your spouse obtained in the time of marriage, are to be split equally, just as assets are. Just as you may think you are only able to receive the good, that is not true and you must be able to determine and be able to handle the financial difficulties associated with debts. 

What is Excluded Family Property?

Assets include all items with any financial gain, such as the above mentioned cars, or even, bank investment accounts. Now, you need to remember also what is excluded: 

Section 85 (1) The following is excluded from family property:

(a) property acquired by a spouse before the relationship between the spouses began;

(b) inheritances to a spouse;

(b.1) gifts to a spouse from a third party;

(c) a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for

(i) loss to both spouses, or

(ii) lost income of a spouse;

(d) money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for

(i) loss to both spouses, or

(ii) lost income of a spouse;

(e) property referred to in any of paragraphs (a) to (d) that is held in trust for the benefit of a spouse;

(f) a spouse’s beneficial interest in property held in a discretionary trust

(i) to which the spouse did not contribute, and

(ii) that is settled by a person other than the spouse;

(g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).

(2) A spouse claiming that property is excluded property is responsible for demonstrating that the property is excluded property.

(3) If property is excluded from family property under subsection (1), the exclusion applies despite any transfer of legal or beneficial ownership of the property from a spouse to the other spouse.

While the above list is perhaps a lot and requires some critical thinking, you will likely need a lawyer in order to assist you to determine if the home you owned and paid off mortgage for before marrying your spouse is in fact excluded property. While on the face value, that is perhaps correct – it may be complicated when your spouse resided there with you as a spouse for a period of 25 years. 

It is critical to remember that the assets and debts that you bring into the marriage – are yours to handle alone. Even if you had a $100,000 debt and you got married when it was only $50,000 left – that is still yours to be concerned with alone. If you have assets that you are bringing into the marriage such as gifts of fine jewelry, or a property that you and your spouse reside in for a limited period of time before you separate, that is likely to be yours. 

The concerns arise when your spouse may seek to make claims for compensation such as compensatory claims such that they took care of the home while your career flourished. These are legal concerns you certainly need legal counsel to discuss with you as well as assist in the division of property even if without the court, such as through a prenuptial agreement ahead of marriage in order to state that your spouse will not come for your belongings. 

Give us a call in order to determine what is yours and have your financial assets taken care of. Especially when considering the long lasting effects for concerns such as wills, this is critical to turn your mind to when you are in fact separating from your spouse, or as mentioned above, before you even get married.