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The division of property explained

Until recently, there was no legislation in Alberta governing how the property of common law spouses should be divided. Historically, we have had to rely on judge-made common law, which provided principles relating to the division of common law spouses property. The basis for a distribution of property during a common law relationship involved equitable principles of constructive trust, resulting trust, unjust enrichment, and/or quantum meruit.  Case law varied and was fact-specific, and accordingly there was no set formula for determining each partner’s entitlement to their property, which made litigating these files risky and expensive.

As of January 1, 2020, Alberta’s new Family Property Act is in force, the effect of which is to bring unmarried couples who have separated on or before January 1, 2020 under the same property-sharing scheme as married couples.

In Alberta, the law does not refer to couples as being “common law,” but rather as Adult Interdependent Partners. An unmarried couple would qualify as being an Adult Interdependent Partnership under the Adult Interdependent Relationships Act if they lived together in a relationship of interdependence:

  1. For a continuous period of at least 3 years; or
  2. In a relationship of some permanence and have a child together by birth or adoption; or
  3. The two people have entered into an agreement to be Adult Interdependent Partners in accordance with the regulations.

Under the new Family Property Act, upon the breakdown of a relationship, the property of Adult Interdependent Partners is treated the same as property owned by married couples. This means a 50/50 division of property acquired during the relationship (with certain exceptions).

It is important to know that a claim for their remedies must be commenced within two years of the date of separation or the claim will be statute barred as a result of the Limitations Act.

Married and Unmarried Couples

Property division - Jones divorce law services

Whether parties are married or cohabiting, a separation or divorce involves couples detaching their intertwined financial lives and separating their assets and debts. In order to resolve those matters in a legally enforceable manner, which protects both parties, they must sign a binding contract, obtain an arbitration award or obtain court judgment.

If parties proceed to arbitration, or trial the division of their assets and liabilities will occur pursuant to the Family Property Act and/or the common law (judge made law). In the event parties agree to divide their property in mediation, they have the ability to think outside the box and reach any agreement they find mutually acceptable.

Regardless of the process used to divide assets and liabilities, parties need to be well informed of the law. It is essential that decisions made when agreeing upon a settlement are informed decisions. It is also imperative that parties can present their case appropriately in arbitration and have confidence that the arbitrator has the legal knowledge, training and experience to make a correct decision with a proper application of the law.

The division of family property can be extremely complicated. Properly identifying and addressing tax issues, valuation issues, and the myriad of issues relating to exemptions can be crucial and can have massive implications in the final outcome of a case.

At Jones Divorce and Family Law you can have confidence that you are in good hands. Your matter will be resolved thoroughly and professionally, will be legally binding and enforceable and will address the nuances of how the law applies to your particular circumstances.