Dividing property in a divorce or separation can cause stress and concern for many people.
Add in confusion over what is and is not eligible for division and people can get overwhelmed. However, learning what to expect from the process can make it a little easier to navigate. For instance, you should know what is and is not family property, and why the distinction matters.
What is family property?
British Columbia laws state that family property is property owned by at least one spouse on the date of separation. This can include:
- The matrimonial home
- Shares in a business
- Money in bank accounts
- Personal property
- Pension plans and retirement savings
- Increases in value of excluded property
- Debts and other financial obligations
Though there are exceptions, these and other types of family property will be eligible for division in a divorce or separation.
What is not family property?
There is some property shielded from division. These items are excluded property, and they generally stay with one person. Excluded property might include:
- Gifts to one person from a third party
- Property brought into the relationship by one party
- Property shielded from division in a premarital agreement
Typically, these types of properties will not be distributed in a divorce or separation. However, it is important to note that the distinction between what is and is not family property can become confusing, especially in cases of complex assets. Under these circumstances, legal guidance can be crucial.
Why the distinction matters
The courts (or spouses) will divide family property equally, unless there is a reason why equal distribution would be unfair. As such, it is important to have a full and accurate accounting for what is and is not family property.
Parties can leave this decision in the hands of a court, or they can reach agreements themselves. Parties opting for the latter generally have more freedom and flexibility when it comes to categorizing, valuing and distributing property.
Understand that properly categorizing property and debts in the first place can make property division easier. However, it can be more challenging than people expect, so it can be wise to consult a lawyer.