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Difference between revisions of "Property and Debt in Family Law Matters"
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Property and Debt in Family Law Matters (view source)
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Under s. 85(1)(a), property that was brought into a relationship is excluded from the pool of family property that is supposed to be divided equally between spouses. Under s. 96, the court "must not" order a division of excluded property, except in limited circumstances. A spouse is therefore normally entitled to keep the excluded property he or she owned when the relationship began. Under s. 85(2), however, it is up to the person who's saying that property is excluded property to prove that the property is excluded property. | Under s. 85(1)(a), property that was brought into a relationship is excluded from the pool of family property that is supposed to be divided equally between spouses. Under s. 96, the court "must not" order a division of excluded property, except in limited circumstances. A spouse is therefore normally entitled to keep the excluded property he or she owned when the relationship began. Under s. 85(2), however, it is up to the person who's saying that property is excluded property to prove that the property is excluded property. | ||
For most couples, property brought into a relationship will form the largest component of a spouse's excluded property. However, when most people marry or move in together, counting up their assets is not the foremost thing on their mind. This means that you may wind up having to do some historical accounting to figure out what you | For most couples, property brought into a relationship will form the largest component of a spouse's excluded property. However, when most people marry or move in together, counting up their assets is not the foremost thing on their mind. This means that you may wind up having to do some historical accounting to figure out what you each owned years ago. Whether you're just starting a relationship or are trying to figure out what you once had, these are the documents you need to look for: | ||
*bank statements for the period that includes the date you began to live together or got married, whichever came first, | *bank statements for the period that includes the date you began to live together or got married, whichever came first, | ||
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*credit card and loan statements for that period. | *credit card and loan statements for that period. | ||
It will be a harder to look back in time to figure out the value of things like cars, motorcycles, trailers, boats, snowmobiles and so on. If you're entering a relationship now, it will be helpful to look up the [http://www.canadianblackbook.com/ Canadian Black Book] or [http://www.kbb.com/ Kelley Blue Book] estimated values for vehicles. Boats and trailers may need to be specially valued by a dealer. | It will be a harder to look back in time to figure out the value of things like cars, motorcycles, trailers, boats, snowmobiles and so on. If you're entering a relationship now, it will be helpful to look up the [http://www.canadianblackbook.com/ Canadian Black Book] or [http://www.kbb.com/ Kelley Blue Book] estimated values for vehicles. Boats and trailers may need to be specially valued by a dealer. It is important to note that you cannot exclude the ''value'' of the property calculated from the start of the relationship. For example, let's assume one party owned a car worth $20,000 at the beginning of the relationship. Say it is only worth $10,000 at the time of separation. That party gets to keep the car itself, but does not get $20,000 worth of property out of ''family property''. If the car was traded in towards the purchase of a second car during the relationship, however, the trade-in value would be ''excluded property''. | ||
===Property and debt acquired during the relationship=== | ===Property and debt acquired during the relationship=== | ||
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===Individually-owned assets=== | ===Individually-owned assets=== | ||
Where a person believes that he or she should have an interest in property owned only by the other person, a claim against that property can only be made under the common law, specifically the law of equity and the law of trusts. | Where a person who is not a spouse believes that he or she should have an interest in property owned only by the other person, a claim against that property can only be made under the common law, specifically the law of equity and the law of trusts. | ||
The essential point of this sort of claim is that the non-owning party has, or should be considered to have, a stake in property owned by the other party. The non-owning party's interest in that property is said to be held ''in trust'' for the non-owning party by the person who owns the property on paper. The non-owning party is the beneficiary of that trust and should be entitled to receive compensation for his or her interest in the property under the trust. | The essential point of this sort of claim is that the non-owning party has, or should be considered to have, a stake in property owned by the other party. The non-owning party's interest in that property is said to be held ''in trust'' for the non-owning party by the person who owns the property on paper. The non-owning party is the beneficiary of that trust and should be entitled to receive compensation for his or her interest in the property under the trust. | ||
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In the example above, a concrete value can be attached to Frank's contributions to the company and to his labour in the home: what would it have cost to hire a housekeeper and a bookkeeper during that period? Or, how much did Lois' company grow in value as a result of Frank's efforts? This is the beginning of fixing a dollar value on Frank's interest in the company and in Lois' house. | In the example above, a concrete value can be attached to Frank's contributions to the company and to his labour in the home: what would it have cost to hire a housekeeper and a bookkeeper during that period? Or, how much did Lois' company grow in value as a result of Frank's efforts? This is the beginning of fixing a dollar value on Frank's interest in the company and in Lois' house. | ||
Again, trust claims are complex and the case law supporting and opposing such claims is massive. If you are not a spouse and wish to make claim against property owned only by your partner, I | Again, trust claims are complex and the case law supporting and opposing such claims is massive. If you are not a spouse and wish to make claim against property owned only by your partner, I recommend that you hire a lawyer to help. | ||
==Tax issues== | ==Tax issues== | ||
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Normally, if you wish to cash out an RRSP, you have to pay tax on the RRSP as if the RRSP was taxable income, like employment income. Under the federal ''[http://canlii.ca/t/7vb7 Income Tax Act]'', transfers of RRSPs between spouses are tax neutral, under what are called the ''tax-free spousal rollover'' provisions of the act. | Normally, if you wish to cash out an RRSP, you have to pay tax on the RRSP as if the RRSP was taxable income, like employment income. Under the federal ''[http://canlii.ca/t/7vb7 Income Tax Act]'', transfers of RRSPs between spouses are tax neutral, under what are called the ''tax-free spousal rollover'' provisions of the act. | ||
When RRSPs are to be transferred between spouses according to a separation agreement or court order, the RRSPs are simply transferred between the spouses' RRSP accounts without having to cash them out, and no tax is payable. | When RRSPs are to be transferred between spouses according to a separation agreement or court order, the RRSPs are simply transferred between the spouses' RRSP accounts without having to cash them out, and no tax is payable. Your bank or credit union can provide you with the form to do this. | ||
===Real property=== | ===Real property=== | ||
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* [http://www.bcrelinks.com/download/ptt/pttform2.pdf Special Property Transfer Tax Return] | * [http://www.bcrelinks.com/download/ptt/pttform2.pdf Special Property Transfer Tax Return] | ||
{{REVIEWED | reviewer = [[ | {{REVIEWED | reviewer = [[Megan Ellis|Megan Ellis QC]], December 9, 2014}} | ||
{{JP Boyd on Family Law Navbox|type=chapters}} | {{JP Boyd on Family Law Navbox|type=chapters}} | ||
