When British Columbia spouses separate, their property and debt is divided according to the Family Law Act. Generally, each spouse receives half of the family property and half of the family debt. Family property includes such things as bank accounts, business interests and pensions. Some property is excluded, although it does include increases in the value of the excluded property that occurred during the relationship.
Excluded property is property that a spouse owned at the beginning of the relationship. Examples include inheritances, gifts and court awards. Excluded property belongs to the spouse who brought the property into the relationship, and it isn’t divided. Debt is handled in a similar way, meaning that family debt is usually split 50-50 upon dissolution of a relationship, but individual debt is not.
A spouse is defined as one of the partners in a marriage or a marriage-like relationship existing for two or more years. When spouses divorce or separate, they have two years to ask a court for a division of property and debt. Although courts usually divide property and debt evenly, they can elect a different methodology that is perceived to be more fair and equitable. Spouses can also create their own property division agreement.
The division of property and debt can become complicated, especially in cases where the value of the assets has grown during the marriage or where one or both spouses own significant business interests. While courts usually divide property and debt equally, a couple is free to devise their own plan or to develop one during mediation. A spouse who needs assistance with dividing property and debt may want to use the services of a lawyer who has experience in family law.
Source: The Canadian Bar Association, British Columbia Branch, “Dividing Property and Debts “, August 28, 2014
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