Questions & Answers
What does the term asset mean?
An asset is anything that has a cash value. This includes things like bank accounts and pensions, as well as anything that could be sold for cash. For example, a life insurance policy that can be surrendered for a cash value during the person’s life would be an asset in the amount of the surrender value. Other life insurance policies that cannot be surrendered for a cash value would not be an asset.
Can I sell any of our stuff after we separate?
Perhaps but in most cases the value of what has been sold will be considered when the division of family property is determined. If you sold something for less than it was worth your spouse may still be entitled to half of the item’s fair market value (what the item would likely sell for if it was offered for sale to the general public). Also, if either spouse has or is going to sell, give away or waste property to avoid it being divided the other spouse can apply for a court order to prevent this.
What if I have something, like a bank account, that my spouse does not know about?
If a court is being asked to deal with the division of family property a Property Statement must usually be filed. You must swear that the information in your Property Statement is true and complete to the best of your knowledge. It is a criminal offence to swear a false statement with the intention to mislead someone. There can be serious legal consequences for not disclosing an asset. Many agreements state that they do not cover assets that are not disclosed. As well, a court could find an agreement to be grossly unfair and unconscionable if it was not based on a full disclosure of assets. A court could then set aside the agreement.
We want to divide our property evenly but are not sure how to deal with property that can’t physically be divided or that neither one of us wants.
Spouses may agree that one spouse will get something, like a vehicle, and the other spouse will get one-half of its cash value or other property to make up the value. If spouses can’t agree on which spouse should get the property, or neither spouse wants it, the item can be sold and the proceeds divided.
I own some property with my brother. Is this included in family property?
Yes, your share is family property. For example, if you bought a car with your brother and you each paid half for it, your half share would be included in family property. Keep in mind that it is the value that will be shared – it does not mean that your spouse automatically is part owner of the asset too. You may agree or the court may order that your spouse will receive something else of equivalent value.
We agree that one of us will take responsibility for a loan that is in both our names. What happens if the loan payments are not made?
An agreement between spouses does not affect the rights of a lender. The lender can pursue payment from either or both spouses. If you are planning on having one of you take responsibility for a loan that is in both your names you will need to talk to the lender first to see if they will agree to put the loan in just one name. They may not want to do this since it means they can no longer collect from both of you.
Is there any way to give one spouse full responsibility for a debt or loan that is in both our names?
You would either need to get the lender to agree to change the terms of the loan or have that spouse pay the loan out, if this is allowed by the terms of the loan.
Can one spouse agree to pay all or some of a loan or debt in the name of the other spouse?
Spouses can agree to this between themselves but the lender can still collect only from the spouse who has signed the loan. If spouses want to agree that one spouse will pay out the other spouse’s loan they need to first look at the loan agreement and see if the loan can be paid out in full. For example, mortgages may have a penalty clause for paying out the full mortgage ahead of schedule.
What happens with credit card debts?
Like any other loan, whoever is responsible to pay the bill under the terms of the credit card agreement will continue to be responsible. Depending on how the credit card was set up this may be one or both spouses. Agreements between spouses about who will be responsible do not affect the right of lenders to collect from whoever signed the credit card agreement. You may want to cancel any credit card in both your names to avoid any more joint debt being accumulated.
If we agree on how to divide everything, do we still need to see a lawyer?
Yes, both spouses must receive independent legal advice on an agreement for it to be legally binding. See Property Agreements for more information.