When couples in British Columbia end their relationships, there are often two primary concerns — what happens to their children and what happens to their property. Unless you entered into an agreement prior to your relationship that divides your property upon divorce, you will need to address this issue during your proceedings. You will also need to go through this process if your common law relationship lasted for a minimum of two years.
The trick is knowing what category each piece of property falls into since this will dictate how it will be divided. Having at least a basic understanding of how the property division process works could help avoid any unnecessary disputes borne out of not understanding how the law views your assets.
Some property is exempt from division
During a divorce, the court attempts to divide property equally as long as doing so does not put one party at an unfair advantage. However, you may have some property that you believe should not be included in that division. Under the law, the following are considered “excluded property,” and therefore, not subject to division:
- Inheritances and gifts you received during your relationship
- Insurance proceeds
- Property held in trust
- Some types of damage awards
- Property you owned prior to the relationship
If you can provide evidence indicating these assets belong to you alone, you do not have to divide them as part of the proceedings. However, if the value of any of the above increased during your relationship, the amount of the increase becomes divisible.
Everything else qualifies as family property
All property that does not fit into the category of excluded property falls into the category of “family property” and is divided equally between the parties unless an equal division would not result in a fair distribution. Family property includes assets such as the following:
- Business interests
- The family home
- Insurance policies
- Bank accounts
As mentioned above, family property may also include any increase in the value of excluded property. This list is not exhaustive, by the way. You could own other property in your name alone or jointly that falls under the umbrella of this category.
Negotiating your property settlement agreement
Many negotiations break down due to a misunderstanding of the process or a misunderstanding of whether the property is included in family property or qualifies as excluded property. Now that you have some idea of how your property will be viewed if you were to go to court, it may keep you from spending time arguing about certain assets during the negotiations for your property settlement.
Whether you decide to use collaborative law or mediation, or if your relationship is more contentious and requires litigation, there are resources readily available to you to help minimize and resolve any disputes so that you can focus on moving forward toward a better future.