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Difference between revisions of "Protecting Property and Debt in Family Law Matters"
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Protecting Property and Debt in Family Law Matters (view source)
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===Take stock of property and debt=== | ===Take stock of property and debt=== | ||
Firstly, you might want to take a careful, but not too obvious, tally of what each of you owns and owes. This might be difficult if you and your spouse keep separate bank accounts and maintain your own investments, but make your best efforts. A list of the bank accounts, RRSP and investment accounts, cars, properties, loans, lines of credit and credit cards you have may prove to be extremely useful. Even if you can't get all the <span class="noglossary">account</span> details, a record of the names of the financial institutions that are sending your spouse mail can be extremely useful. | Firstly, you might want to take a careful, but not too obvious, tally of what each of you owns and owes. This might be difficult if you and your spouse keep separate bank accounts and maintain your own investments, but make your best efforts. A list of the bank accounts, RRSP and investment accounts, cars, properties, loans, lines of credit and credit cards you have may prove to be extremely useful. Even if you can't get all the <span class="noglossary">account</span> details, a record of the names of the financial institutions that are sending your spouse mail can be extremely useful. However, the best evidence is to obtain copies of documentary evidence (i.e. copy of a bank statement) to evidence the assets and property in the name of your spouse. | ||
===Make it clear that you've separated=== | ===Make it clear that you've separated=== | ||
Once you've decided that your relationship can't continue, and you're sure that it can't continue, you need to separate. This doesn't mean that you and your spouse need to move into separate homes, but you need to announce your <span class="noglossary">decision</span> and you should probably do it in writing so that you have a record of the date of separation. | Once you've decided that your relationship can't continue, and you're sure that it can't continue, you need to separate. This doesn't mean that you and your spouse need to move into separate homes, but you need to announce your <span class="noglossary">decision</span> and you should probably do it in writing so that you have a record of the date of separation. If you continue to live in the same home after you have separated, you must ensure that you live separate lives (i.e. you close joint accounts, you do not do laundry or cook dinner for your spouse, you do not go out as a couple or hold yourself out as a couple at social events) or your spouse may allege that you reconciled or you changed your mind after announcing the separation. | ||
If you own your home in joint tenancy with your former spouse, there is no reason to sever the joint tenancy in order to protect your interest in the home. The reason for that is because under s. 81(b) of the provincial ''[[Family Law Act]]'', when separation happens each spouse takes a one-half interest in all family property as tenants in common, regardless of how the property was owned before separation, and becomes responsible for one-half of all family debt. | If you own your home in joint tenancy with your former spouse, there is no reason to sever the joint tenancy in order to protect your interest in the home. The reason for that is because under s. 81(b) of the provincial ''[[Family Law Act]]'', when separation happens each spouse takes a one-half interest in all family property as tenants in common, regardless of how the property was owned before separation, and becomes responsible for one-half of all family debt. | ||
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====Entries under the ''Land (Spouse Protection) Act''==== | ====Entries under the ''Land (Spouse Protection) Act''==== | ||
Married spouses and unmarried spouses may file an ''entry'' on the title of the family home under the provincial ''Land (Spouse Protection) Act''. The entry will prevent a spouse from transferring, selling, leasing, or making a gift of the family home without the knowledge and approval of the spouse filing the entry. A spouse is not given notice of an entry filed against the family home under the ''Land (Spouse Protection) Act.'' | Married spouses and unmarried spouses may file an ''entry'' on the title of the family home under the provincial ''Land (Spouse Protection) Act''. This only applies to the family home and not to rental property. The entry will prevent a spouse from transferring, selling, leasing, or making a gift of the family home without the knowledge and approval of the spouse filing the entry. A spouse is not given notice of an entry filed against the family home under the ''Land (Spouse Protection) Act.'' | ||
The great thing about these entries is that you can get one whether court proceedings have started or not. This is an ideal way to protect yourself if you only have a slight concern about your relationship or the trustworthiness of your spouse, but don't have the need to begin a proceeding just yet. The downside, of course, is that entries under this act only protect the single property that is or was used as the family home. | The great thing about these entries is that you can get one whether court proceedings have started or not. This is an ideal way to protect yourself if you only have a slight concern about your relationship or the trustworthiness of your spouse, but don't have the need to begin a proceeding just yet. The downside, of course, is that entries under this act only protect the single property that is or was used as the family home. | ||
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====Certificates of pending litigation under the ''Land Title Act''==== | ====Certificates of pending litigation under the ''Land Title Act''==== | ||
Where a court proceeding has started in the Supreme Court, a ''Certificate of Pending Litigation'' (CPL), formerly called a ''lis pendens'', can be registered against the title of any property owned by you and your spouse at the Land Title and Survey Authority. As long as you have asked for a CPL in your Notice of Family Claim or Counterclaim and made a claim for the division of family property, you will be entitled to register a CPL. | Where a court proceeding has started in the Supreme Court, a ''Certificate of Pending Litigation'' (CPL), formerly called a ''lis pendens'', can be registered against the title of any property owned by you and your spouse or your spouse and a third party (such as a parent) at the Land Title and Survey Authority. As long as you have asked for a CPL in your Notice of Family Claim or Counterclaim and made a claim for the division of family property, you will be entitled to register a CPL. If title to the property is registered in the name of your spouse and a third party, you must name the third party as a party in the Notice of Family Claim or Counterclaim if you wish to seek relief against the third party vis-à-vis the property. | ||
The effect of a CPL is to announce to anyone interested in the property, such as a mortgagee or a creditor or a potential buyer, that ownership of the property may change as a result of the litigation. This discourages and usually prevents the sale of the property or its use as collateral. | The effect of a CPL is to announce to anyone interested in the property, such as a mortgagee or a creditor or a potential buyer, that ownership of the property may change as a result of the litigation. This discourages and usually prevents the sale of the property or its use as collateral. | ||
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<blockquote><blockquote><tt>(iv) provide for any other matter in connection with the extraprovincial property;</tt></blockquote></blockquote> | <blockquote><blockquote><tt>(iv) provide for any other matter in connection with the extraprovincial property;</tt></blockquote></blockquote> | ||
The first stumbling block is to figure out whether the court can divide the out-of-province property, and that requires a difficult analysis under ss. 106, 107 and 108 of the | The first stumbling block is to figure out whether the court can divide the out-of-province property, and that requires a difficult analysis under ss. 106, 107 and 108 of the Act. Assuming the court can make such orders, the next step is to find out whether the order would "enforceable against a spouse" in the place where the property is located. If the <span class="noglossary">answer</span> to both questions is yes, then the court may make an order for the preservation of the foreign property. | ||
This part of the | This part of the Act is extremely complicated and you should get advice from a lawyer whenever you may need to deal with movable and immovable property located outside of British Columbia. | ||
===Movable assets=== | ===Movable assets=== | ||
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The court can be reluctant to issue a s. 91 order that is intended to deal with assets located outside the province, since in most cases the courts of British Columbia cannot make orders about things located outside the province. In a 2002 case called ''[http://canlii.ca/t/50dw Boyd v. Boyd]'', 2001 BCCA 535, the Court of Appeal confirmed that the court can make ''in personam'' restraining orders that are effective against movable assets located outside the province. | The court can be reluctant to issue a s. 91 order that is intended to deal with assets located outside the province, since in most cases the courts of British Columbia cannot make orders about things located outside the province. In a 2002 case called ''[http://canlii.ca/t/50dw Boyd v. Boyd]'', 2001 BCCA 535, the Court of Appeal confirmed that the court can make ''in personam'' restraining orders that are effective against movable assets located outside the province. | ||
It is important to remember that a section 91 order is an "in personam" order, which means that it is only effective against the person whom the order is being made. Accordingly, if your spouse has a significant amount of money in a bank account, investment account or similar type of savings vehicle, and you are concerned that your spouse will transfer the monies somewhere else even if there is an order in place, then you should ensure that the financial institution where the accounts are being held are named in the notice of application, the financial institution is served with your application and that you seek specific relief vis-à-vis the financial institution. Otherwise, the financial institution does not have any legal obligation to prevent your spouse from transferring assets out of the financial institution. | |||
If a s. 91 order is not available for some reason, a ''Mareva'' injunction will have the same effect. However, ''Mareva'' injunctions are not granted automatically and you must satisfy the test described just above. | If a s. 91 order is not available for some reason, a ''Mareva'' injunction will have the same effect. However, ''Mareva'' injunctions are not granted automatically and you must satisfy the test described just above. | ||
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{{REVIEWED | reviewer = [[ | {{REVIEWED | reviewer = [[Helen Chiu]], May 14, 2019}} | ||
{{JP Boyd on Family Law Navbox|type=chapters}} | {{JP Boyd on Family Law Navbox|type=chapters}} | ||
