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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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| link = [http://www.clicklaw.bc.ca/resource/1639 How to divide property and debts] | | link = [http://www.clicklaw.bc.ca/resource/1639 How to divide property and debts] | ||
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It's sometimes necessary to take steps to protect family property, family debt and excluded property until a final agreement or order dividing assets is made. Failing to take these steps can sometimes result in property being sold, lessened in value, used as collateral for a loan, moved out of province or being seized by a trustee in bankruptcy or a creditor. Most of the time it only becomes important to protect property after a couple has separated. | It's sometimes necessary to take steps to protect family property, family debt, and excluded property until a final agreement or order dividing assets is made. Failing to take these steps can sometimes result in property being sold, lessened in value, used as collateral for a loan, moved out of province, or being seized by a trustee in bankruptcy or a creditor. Most of the time it only becomes important to protect property after a couple has separated. | ||
This | This section reviews some important initial steps that you can take to secure family property and family debt. It also looks at the restraining orders that can stop family property from being disposed of, the problems posed by third-party claims such as debts and bankruptcy, and how assets located outside British Columbia can be protected. | ||
==Initial steps== | ==Initial steps== | ||
It may seem at bit neurotic to be worrying about assets when your relationship is falling apart, but this is precisely the time to be concerned. It certainly isn't the case that every spouse is busy squirrelling money away in Switzerland or Antigua, or hatching plans to transfer the title of the family home to a loan shark from Las Vegas, but there are certain steps you should take regardless of how well you think you know your spouse. There is, as they say, no sense in bolting the barn door after the horses | It may seem at bit neurotic to be worrying about assets when your relationship is falling apart, but this is precisely the time to be concerned. It certainly isn't the case that every spouse is busy squirrelling money away in Switzerland or Antigua, or hatching plans to transfer the title of the family home to a loan shark from Las Vegas, but there are certain steps you should take regardless of how well you think you know your spouse. | ||
There is, as they say, no sense in bolting the barn door after the horses have gone. It's fairly reasonable to take steps to protect your own interests, and in most cases you probably should. | |||
===Take stock of property and debt=== | ===Take stock of property and debt=== | ||
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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 decision 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 decision and you should probably do it in writing so that you have a record of the date of separation. | ||
Under s. 81(b) of the provincial ''[[Family Law Act]]'', when separation happens each spouse takes a one-half 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. This can be critical to protect your share of the family property from creditors, your spouse's bankruptcy or court orders made in other court proceedings. | Under s. 81(b) of the provincial ''[[Family Law Act]]'', when separation happens each spouse takes a one-half 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. This can be critical to protect your share of the family property from creditors, your spouse's bankruptcy, or court orders made in other court proceedings. | ||
While it's always a good idea to consult with a lawyer if you have a family law problem, be especially sure to do so if you're not certain whether separating would be helpful or harmful. | |||
There are only a few times when a separation is a bad idea, usually when the effect of separation will limit a claim to one-half of the family property when there's a good chance that it might be more. Say, for example, that a spouse is in poor health and dying when the parties separate. The effect of separation may mean that a surviving spouse will get no more than half of the deceased spouse's estate when the spouse might have received more than half as surviving joint tenant. | There are only a few times when a separation is a bad idea, usually when the effect of separation will limit a claim to one-half of the family property when there's a good chance that it might be more. Say, for example, that a spouse is in poor health and dying when the parties separate. The effect of separation may mean that a surviving spouse will get no more than half of the deceased spouse's estate when the spouse might have received more than half as surviving joint tenant. | ||
===Register your interest in property=== | ===Register your interest in property=== | ||
Registering an interest in real property will stop the property from being sold and may prevent the property from being borrowed against. The two most common ways to do this are by filing a Certificate of Pending Litigation under the ''[http://canlii.ca/t/8456 Land Title Act]'' or | Registering an interest in real property will stop the property from being sold and may prevent the property from being borrowed against. The two most common ways to do this are by filing an entry under the ''[http://canlii.ca/t/8451 Land (Spouse Protection) Act]'' with the Land Title and Survey Authority a Certificate of Pending Litigation under the ''[http://canlii.ca/t/8456 Land Title Act]'' or by filing a Certificate of Pending Litigation under the ''[http://canlii.ca/t/8456 Land Title Act]''. | ||
====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 | 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. | ||
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'', 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 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. | ||
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 or the use of the property 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, or the use of the property as collateral. | ||
You can file your CPL at the same time as you file your Notice of Family Claim or Counterclaim. The registry will stamp your CPL and you must take the stamped CPL and file it in the Land Title and Survey Authority together with a copy of your Notice of Family Claim or Counterclaim. | You can file your CPL at the same time as you file your Notice of Family Claim or Counterclaim. The registry will stamp your CPL and you must take the stamped CPL and file it in the Land Title and Survey Authority together with a copy of your Notice of Family Claim or Counterclaim. | ||
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====Notices and financing statements under the ''Family Law Act''==== | ====Notices and financing statements under the ''Family Law Act''==== | ||
Spouses who have made a cohabitation agreement, a marriage agreement or a separation agreement dealing with real property can file a ''notice'' of the agreement against the title of the property with the Land Title and Survey Authority under s. 99 of the ''Family Law Act''. A notice can be filed whether court proceedings have started or not, and will prevent the other spouse from transferring, selling, leasing or otherwise dealing with the property without the voluntary cancellation of the notice or a court order. | Spouses who have made a cohabitation agreement, a marriage agreement, or a separation agreement dealing with real property can file a ''notice'' of the agreement against the title of the property with the Land Title and Survey Authority under s. 99 of the ''Family Law Act''. A notice can be filed whether court proceedings have started or not, and will prevent the other spouse from transferring, selling, leasing, or otherwise dealing with the property without the voluntary cancellation of the notice or a court order. | ||
A ''financing statement'' can be filed in the [http://www.bcregistryservices.gov.bc.ca/bcreg/pprpg/ppinfo.page Personal Property Registry] against a manufactured home under s. 100. This will stop the manufactured home from being transferred, and any new debts registered against the manufactured home will come in second to the spouse's interest under the financing statement. | A ''financing statement'' can be filed in the [http://www.bcregistryservices.gov.bc.ca/bcreg/pprpg/ppinfo.page Personal Property Registry] against a manufactured home under s. 100. This will stop the manufactured home from being transferred, and any new debts registered against the manufactured home will come in second to the spouse's interest under the financing statement. | ||