Division of Property
Upon a separation, the new Family Law Act of BC (FLA) provides for the division of family assets. The division takes place upon a divorce, annulment or declaration by a court that there is no reasonable prospect of reconciliation between the parties.
Family assets are defined as any assets that are owned by either spouse and are ordinarily used for a family purpose (such as the family home, family car, recreational property, etc.) Family assets also include RRSPs and pension plans.
The division of property under the new Family Law Act of BC (FLA) is an equal division. However, the court has the power to change the equal division of property having regard to certain specific factors. Some factors which the court can consider in ordering an unequal division of property include whether the marriage was of a short duration, whether property was acquired before the marriage or through inheritance or gift, whether one spouse has a need for a larger share of property in order to become or remain financially independent, and whether one spouse has the responsibility to provide a home for the children of the marriage.
The division of property can take place by way of the sale of property and division of the proceeds of the sale, or by the court ordering one spouse to retain property upon paying compensation to the other spouse.
In the case of pensions, the new Family Law Act of BC (FLA) provides for the deferred sharing of the pension benefits accrued during the marriage: pension benefits are not divided until the parties actually retire.
In the case of RRSPs, the Income Tax Act provides for a "rollover" permitting RRSPs to be transferred from one spouse to the other without any income tax becoming payable. However, a court order or written separation agreement is required by Revenue Canada.
Business assets held by one spouse can be considered as family assets if the other spouse has made a direct or indirect contribution to the acquisition or management of the business asset, including indirect contribution by way of effective household management and child-rearing responsibilities.
Only the Supreme Court has the jurisdiction to deal with the division of family property; see The Court Process for more information.
Note: The information provided above is general information only and is provided as a public service. For detailed information and advice with respect to your specific circumstances, please contact our office for an appointment.
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