Property & Debt Division

Family Property is defined as all properties in the name of either spouse at the time of separation regardless of any contributions to maintenance or the acquisition of the asset(s). Family Property may include:

• RRSPS, Stocks, and Investments
• Pensions
• Shares in corporations
• bank accounts
• insurance policies (in particular cash surrender value)
• Gain in the value of excluded property
• Certain trusts (i.e. discretionary trusts are also considered family property, if they meet certain criteria).

Under the Family Law Act, subject to the spouse’s claim for exclusion, each spouse is presumed to have one half interest in Family Property.

Property acquired after separation, may also be considered family property if you can trace it back to a family property. For example, in Xu v. Chu, 2019 BCCA 414 (CanLII), our experienced property and debt division lawyers, were able to successfully argue that the husband’s condo, acquired post separation, is considered family property and the gain in the value of his condo should be divided equally between the parties.

Family Debt includes any financial obligation incurred by either spouse during the relationship. Debt incurred post separation may also be considered Family Debt if it is incurred for the purpose of maintaining family property.

Book your consult with us to learn more about what constitutes family property and debt.

Under section 85(2) of the Family Law Act, excluded property include:

• property acquired by a spouse before the relationship began;
• inheritances to one spouse;
• gifts to a spouse from a third party;
• a settlement or damage award, unless it’s compensation for a loss to both spouses or compensation for the lost income of either spouse;
• and money paid under an insurance policy, as long as the policy doesn’t insure property, and unless it’s compensation for a loss to both spouses or compensation for the lost income of either spouse.

Only the gain in the value of the excluded property during the relationship is divided between the spouses upon divorce or separation. This means if your excluded property depreciates during your relationship then it would not be subject to division upon divorce or separation (Asselin v Roy, a 2013 BCSC case that was the first case to deal substantively with the division of property under the Family Law Act, para 222).

The default rule is that property is valued at the time of the trial. However, it can be valued at a different date if agreed between the parties or ordered by the court.

The onus to prove exclusion lies with the person who intends to claim the exclusion. To prove exclusion, you need to provide the court with clear and cogent evidence. If documentary evidence is not available, the party bearing the onus of proof will need to testify as to their recollection of the transactions in dispute, which will be scrutinized for credibility (Shih v Shih, 2017 BCCA 37).

To win your claim for exclusion, you should be able to produce documents (i.e. bank transfers, land title documents, property purchase statement, etc) that shows the amount you want to exclude was originally your excluded asset. It is important that you keep track of your paperwork or collect and preserve relevant documents. Keep in mind, sometimes there are deadlines imposed by other institutions to get records. For example, you can ask banks in Canada for production of bank statements going back only 7 years.

Often during long term relationships, you replace properties. You may still be able to claim exclusion so long as you can trace the new property to an excluded asset (i.e. you can show that the property was purchased with an excluded property). The law is slightly more confusing if you’ve transferred your excluded property in BC to your spouse, for example by transferring a house that you originally owned into your now ex-spouse’s name.

In V.J.F. v. S.K.W., 2016 BCCA 186 (CanLII), the husband received a $2 million inheritance (excluded property in BC) and then used this inheritance to build a new family home, which he put into the name of his wife to protect the property from creditors.  Relying on the legal principle of presumption of advancement, the Court of Appeal held that the money was in fact a gift from the husband to the wife and as a result the family home was no longer excluded property but instead divisible 50/50 between the now ex-spouses. However, some cases decided after VJF have not followed the principle laid out in that case. For example, in  K.R. v. J.D., 2017 BCSC 182, Jenkins J. distinguished V.J.F.in concluding that no presumption of advancement arises when one spouse’s inheritance is invested into property owned jointly by that person and his or her spouse.

The excluded property regime under the Family Law Act is not straight forward. It is best to discuss your case with our seasoned Vancouver property division lawyers to strategize your case at the outset and to know what documents you need to prove your exclusion as early as possible.

The common rule is that property is divided equally (i.e. 50/50) between spouses at separation or divorce. However, when it is significantly unfair, the court may depart from equal division and order reapportionment in favour of one spouse.

The value of the property is determined at the time of trial. However, the parties may agree to a different valuation date or the court may order a different valuation date.

You can divide your property either through negotiation, mediation, arbitration, or court order. Negotiation and mediation are cheaper alternatives to court or arbitration, if you are successful at reaching a settlement. To be able to negotiate or mediate effectively, you will need full financial disclosure. If you have started your case in the Supreme Court, you can force meditation by serving a notice to mediate. If you are considering arbitration, keep in mind that both parties need to consent to the process. Most often parties do try to settle their case before resorting to the court for a determination on property and debt division.

To give effect to property division:

1. One party may purchase and payout the other spouse for his or her interests in the assets
2. The property may be listed for sale with either both parties or one of the parties having conduct of sale. The net sales proceeds would then be divided between the parties
3. If you are dividing RRSPs,  you can do it by way of tax free rollover
4. If businesses are at stake, you have several ways that you can divide the business: buyout the party’s interests, sell the business, one party can become a silent partner, or you can have two different companies and each of you would operate one company. You want to make sure that you are dividing your business in the most tax effective manner. We have a team of accountants that we work with closely for dividing complex corporate assets.

Book your initial consult with us today to learn how we can help you with divide your family property and debt. Our divorce lawyers will explore various avenues available to you and will tailor a strategy that best suits your unique circumstances.

A business valuation is a report prepared by an independent expert setting out the value of the business(es) in dispute.  A property appraisal is a report prepared by a property appraiser (not a realtor).

The expert appointed to prepare business valuation report or property appraisal must be either appointed by agreement of the parties or appointed by the court. Otherwise, the report may not be entered as evidence. The expert has a duty to the court to act for the benefit of the court. The expert must be neutral and cannot act for any individual party.

You do not need a business valuation or property appraisal to give effect to property divisionbut you should get one. In the absence of business valuation or property appraisal, the court is left to guess the values of different assets. Trust us when we say: you do not want a judge to guess a value of an asset that is subject to litigation.

Even if you are not considering trial or going to court for property and debt division, you should still get a business valuation or property appraisal as they would help to see what the values of various assets are and how assets should be divided. Your lawyer is not an accountant or a real estate appraiser.

The timing of these reports are crucial. If they are obtained too late, they may not be introduced as evidence at trial.

Book your appointment with us to see how we can help you obtain a business valuation report or a property appraisal.

If you are concerned that your spouse may dispose of family assets prior to trial and thus defeat your claim to those assets, you must act fast.

One option you have is to apply for a Section 91 financial restraining order, otherwise known as an asset freezing order.  This order prohibits your spouse from disposing, encumbering or otherwise dealing with a family asset or an asset at issue.  These Orders are often made on interim basis (prior to trial) to ensure that a parties rights at trial are preserved.

Our family lawyers often deal with situations where companies are at stake and one spouse controls the company. It is possible to obtain freezing orders affecting the companies: for example orders that would prevent your spouse from taking money out of the family company to support his/her lavish lifestyle. However, this is a very technical area of law as you need to ensure that the restraining order would not impact the day-to-day operation or the value of the bussinesses at dispute. Our family lawyers at Nasser Allan LLP have the knowledge and expertise to seek uniquely crafted restraining orders affecting businesses and companies, which would have minimal impact on the day-to-day operations of the entities at dispute.

If you are dealing with foreign/international assets or your spouse is not a resident in BC, you can apply for a Mareva injunction to prevent your spouse from disposing of assets. This injunctive relief helps you protect your interests by preserving the assets in dispute pending trial. Rule 12-2 of Supreme Court Family Rules gives the court the authority to order Mareva injunctions. To successfully obtain a Mareva injunction, you must:

1. demonstrate a strong prima facie case against your spouse;
2. demonstrate that there is a genuine risk that the assets will disappear either inside or outside the jurisdiction of the court prior to judgment (Aetna Financial Services Ltd. v. Feigelman, [1985] 1 SCR 2, 1985 CanLII 55 (SCC); Manousakis v. Manousakis(1979), 10 B.C.L.R. P-21 (S.C.)); and
3. give an undertaking in damages (Manousakis).

Our Family Lawyers at Nasser Allan LLP are fully versed with the law in this area and know how to obtain injunctive reliefs against foreign/international assets or foreign/international residents.

Book your appointment with us today to learn how we can help you protect your interests and preserve assets pending trial.

The BC court does not have jurisdiction over foreign/oversees real assets. You can, however, account for international assets such that there would be an equitable division of property in BC. The BC courts can also provide you with various orders to allow for tracking, tracing, and accounting of foreign assets. The court can order equalization payments to be made by one spouse to even out the distribution of foreign assets or the court may order greater share of Canadian assets to one spouse to account for oversees assets that are in the name of the other spouse.

Our property and debt division lawyers have dealt with dozens of cases dealing with foreign/oversees assets and look forward to assist you in this area of law. Contact us to see how we can strategize your case together.