The Family Property Act
This act governs the division of family property between married spouses or couples who have lived together as spouses for at least two years. The Act does not apply to other individuals.
The Act recognizes that both spouses contribute to child care, household management and financial support. Generally speaking, each spouse is entitled to an equal share of their family property subject to some exceptions and exemptions. These exceptions and exemptions do not apply to the family home.
In dividing family property the court will not consider a spouse’s improper or immoral conduct unless the conduct has financial consequences. For example, the court will always consider whether a spouse has been wasting family property, giving it away or selling it to avoid having it divided. They will also consider whether a spouse’s conduct has been substantially detrimental to the other spouse or the household, as is sometimes the case with conduct such as excessive gambling.
If parties have not made a property agreement, as specified under the Act, either spouse can ask the court for a division of their family property. Such an application can be made at any time during the spousal relationship or immediately after the death of a spouse. Married spouses must make the application before they are divorced. Unmarried spouses must make the application within 24 months following their separation.
What Property is Included
As a general rule, family property includes any real or personal property owned by one or both spouses, or by one or both spouses and a third person, at the time an application is made under the Act. It also includes any property that one or both spouses have an interest or benefit in. Real property includes land and anything attached to the land, such as buildings. Personal property includes moveable objects like household goods, jewelry and cars. Family property also includes such things as business interests, pensions and bank accounts.
Exemptions - What Property is Not Included
The value of property acquired before the spousal relationship began – other than the family home and household goods – is exempt from distribution unless a court orders otherwise. This means that the value of that property at the time the spousal relationship began would not be divided under the Act. The spouse who owned the property would receive the property or the amount that it was worth at the start of the spousal relationship. Any increase in the value of the property since that time could, however, be divided under the Act.
This exemption applies to property that was owned by one spouse before the relationship began as well as property that was given as a gift or inheritance before the spousal relationship began, unless the gift or inheritance was intended for both parties.
Some other family property is also exempt from distribution, including things like one spouse’s settlement from a civil court case or insurance claim for something other than property, and property acquired after divorce or, in the cases of unmarried spouses, more than 24 months after the couple stopped living together. Income earned on exempt property or any appreciation in value on exempt property is also exempted from distribution under the Act. In addition Family property that has been dealt with under a valid property agreement between the spouses is exempt from distribution under the Act.
A court could reject a claim that certain property was exempt if the court was satisfied that the exemption would be unfair. In addition to the considerations discussed under exceptions, the court will also consider…
- contributions of any kind by one spouse to the other spouse, their children or property
- contributions of any kind to acquiring, maintaining, improving or using exempt property
- the value of other property that is available for distribution
- any other relevant fact or circumstance
All family property is presumed to be shareable unless a spouse satisfies the court that it should be exempt from distribution.
* Under the Act debts are not considered property and are not divided between the spouses. They may, however, be factored into the overall division of family property. This is discussed in more detail under Other Family Property and Property Agreements.
How Property is Divided
Property may be physically divided, leaving each spouse with possession of a variety of items making up their share of family property. Because many assets, such as a car, cannot be cut in half, one spouse may get the whole of that particular item and the other spouse may get something else of equivalent value.
Options for Protecting Family Assets Pending Distribution
A court can make an order preventing a spouse from selling, giving away or absconding with property if they are satisfied that the spouse is wasting family property and jeopardizing the family’s financial security or attempting to avoid a division of it under the Act.