Unequal Division Of Property After You Split

A marriage breakdown is traumatic. And lots of things have to be dealt with after you split – from new living arrangements for you and the kids to the financial fallout.

Speaking of the financial consequences, child support and spousal support may have to be paid.

And then there’s often the thorny question of how you should split your property.

In a recent case, our province’s Supreme Court outlined when an unequal division between ex-spouses may be appropriate. In the process, it also shed light on some of the ways our relatively new family law (in effect since mid-March, 2013) differs from the law before.

In this case, Debbie and Doug (all names changed) lived in a town in the interior of B.C. In the fall of 2005, some six months after they started dating, Debbie moved into Doug’s house with her 8-month-old daughter. From then on, they lived together like married folk, and tied the knot officially in the spring of 2007. In the summer of 2008, they had a son, Josh.

Unfortunately, the marriage didn’t work out. Doug and Debbie separated in January 2010, four years and three months after they started to live together like a married couple.

After first determining Doug’s child support obligations and before turning to spousal support, the court dealt with how the couple’s family property should be split (debts weren’t in dispute).

Under the new family law, the property each of you brings into the relationship is “excluded property.” But if it increases in value during the relationship, the increased value becomes family property.

Here, Doug owned the house when Debbie moved in, and also some company shares. Between the time Debbie moved in and the time she and Doug split up, the house equity went up by some $157,000, and the shares by some $86,000. It was only this increase in value that counted as family property.

The baseline rule now is that you are entitled to a one-half share of all family property (and debts). This is regardless of how these assets are used or your contribution to them.

And under the new law, the court will only move away from the “half-half split” baseline rule if an equal division would be “significantly unfair.” This is a stiffer test than under the previous rules – this unfairness must be compelling or meaningful in light of relevant factors.

Doug argued that his and Debbie’s family property (being the increase in house equity and increase in Doug’s shares) should not be split half-half. He wanted a split of 25% to Debbie and 75% to him.

The court did depart from a half-half split of the family property. A key reason was that the marriage relationship between Doug and Debbie was relatively short – only four years and three months. But it allocated 40% to Debbie and 60% to Doug.

If your marriage ends, you should consult a lawyer if you have questions about financial support and property division.

 

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer

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