His, Hers and Ours – How to Divide your Stuff on Divorce

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April 1, 2014
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His, Hers and Ours – How to Divide your Stuff on Divorce

When a couple separates in Medicine Hat, one of the issues that they must deal with is how to divide the property they obtained while they were married.  The legislation which governs the division of property for married people in Alberta is the Matrimonial Property Act (MPA).

The MPA sets out very particular rules about how to divide property between spouses who are separating in Alberta.  There are three types of property recognized in the MPA:

  1. Property which is divided equally between the parties;
  2. Property which is not divided between the parties; and
  3. Property which is divided in a way that the Court considers fair.

As a general rule, the property acquired by a couple from the date they are married until the date they make a Property Agreement, or the date they have a trial, falls into the first category and is divided between the parties equally. This is the case regardless of whose name the property is purchased in, or who actually purchased the item.

The second category includes those items which are not divided.  A summary of those items is as follows:

  1. Property obtained by one spouse as a gift from a third party;
  2. Property obtained by one spouse by inheritance;
  3. Property owned  by one spouse before the marriage;
  4. An award or settlement for damages  in favour of one spouse (for example, settlement proceeds for injuries if one spouse is involved in a motor vehicle accident); and
  5. Proceeds received by one spouse of an insurance policy, that is not in respect to property (for example, if one person is receiving a disability pension).

Items which fall in these categories are not divided between the spouses, unless they are put into an asset which is held in joint names.  The Alberta Court of Appeal has decided that these exempt items then lose some of their exemption.  That is, a portion of the asset is then divided, and a portion remains exempt.

The third category includes those items that the Court would divide in a way that it considers fair.  In deciding how to divide those items, the Court considers a number of things:

  1. the contribution made by each spouse to the marriage, business, and/or property being divided;
  2. the financial situation of each spouse at the time of marriage, and the time of the trial;
  3. the length of the marriage;
  4. whether the property was obtained after the spouses separated;
  5. the terms of any agreement between the spouses;
  6. whether  a spouse has given away or transferred property for less than its value;
  7. a previous distribution of property between the spouses;
  8. a prior order made by a court;
  9. taxes that a spouse may pay as a result of the transfer or sale of property;
  10. whether a spouse has reduced the value of the matrimonial property; and
  11. any fact or circumstance the Court thinks is relevant.

The property in this last category is the most difficult to divide.  There are many cases which have been decided by the Alberta Courts which talk about how to divide this property.  In order to get a good idea of how these things are considered, it is important to speak to a lawyer and get advice about how these things apply to your particular situation.

Pritchard and Co
Pritchard and Co. Law Firm, LLP helps you navigate the turning points of life. Contact us at 403-527-4411 or at lawyers@pritchardandco.com.