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How property and debt are divided when spouses separate

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Tuesday, September 2, 2014.

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

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Dividing a couple’s family property at the end of a marriage

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Wednesday, July 16, 2014.

British Columbia residents may wish to know how property is divided when a couple divorces. The law has a specific method, but couples are free to come to a separate agreement if they wish.

Under B.C. law, there are two categories of property relevant to a couple when they decide to divorce. Family property is defined as any property that each of the spouses came to own, either on their own or as a couple, until the day that they separate. This can be anything from retirement accounts to a family home. Excluded from this definition is anything that falls under the category of excluded property. Three types of property fall under the excluded definition, and they are property owned by a spouse prior to marriage, property that was gifted to or inherited by one spouse, and certain types of legal damages, trust property and proceeds from insurance policies. When this excluded property increases its value during the marriage, however, that increase in value is usually deemed to be family property.

These rules apply to married couples and to those who have cohabited for over two years in a relationship resembling a marriage. Any property that is deemed to be family property and not excluded is divided equally between the former couple when they divorce. In some cases, however, an unequal property division is appropriate when an equal split would not be fair to one party.

Additionally, a couple can choose to negotiate a different division of property agreement if both parties so desire. A lawyer who has experience in family law may be able to counsel one party and decide what constitutes a fair division of the family property. The lawyer may then be able to draft an agreement to be signed by the former spouses.

Source: Justice BC, “What happens to family property when spouses separate?“, July 15, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Preparing for divorce financially

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Friday, June 27, 2014.

Many residents of British Columbia may aware of some of the expenses that can arise out of a divorce, but some may not have considered how these costs might affect a partner who is not employed. According to some commentators, a partner that is not employed during the marriage might not be able to pay for some of the costs necessary for attaining legal representation and securing an equitable settlement.

Determining the average cost of divorce can be very difficult, and for this reason, an unemployed spouse may need to plan ahead financially before filing for divorce. This might include opening a personal credit history that is not associated with the other party. Although a both parties might be entitled to receive a portion of the marital property as part of a settlement, the property division process can be expensive to negotiate.

In some cases, additional costs may appear without warning even after the initial divorce agreement is put into place, and one lawyer in Alberta emphasizes that every court trip will cost some amount of money. For example, travelling outside of the country requires approval from both spouses. If the other spouse fails to provide approval, the matter may be taken to court. However, this issue might be avoided if the couple signs a prearranged travel agreement.

While the process of divorce can be costly, the outcome may provide a more stable living situation for all of the parties involved. However, providing for a future after marriage during divorce negotiations can be difficult without professional help. A lawyer who is familiar with family law may be able to inform a client of his or her rights and obligations throughout divorce proceedings and may offer the client representation during hearings and negotiations with the other party.

Source: St. Albert Gazette , “Women need financial plan for divorce“.

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Understanding rules of property division in BC

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Wednesday, June 18, 2014.

The government of British Columbia enforces special rules concerning how property should be divided for couples. These rules regarding property division pertain to married couples as well as unmarried couples who had been cohabiting for two years or more in a relationship similar to marriage.

British Columbia puts property in two categories: family property and excluded property. Family property is to be shared equally between the partners unless they had entered into a prior agreement regarding the distribution of their shared assets. This property includes everything that the partners had owned together until the day that they separate. Distribution does not depend on whose name is on the asset. Traditionally, family property encompasses the home the family shared, investments, financial accounts, pensions, business interests, insurance policies, RRSPs and the increase in the value of property that has arisen since the relationship commenced.

Excluded property is not subject to division. It includes property that one of the partners had before the relationship commenced, gifts, inheritances and certain damages. However, some excluded property can sometimes be divided. One situation in which this situation arises is when the couple is interdependent and not dividing the property would prevent one partner from receiving a fair share. Additionally, the court can divide property unequally if it would be “significantly” unfair to divide it in an equal manner.

While these are the general rules, the courts do have discretion to provide for different distributions to each partner. Additionally, the partners can create an agreement before their marriage or relationship or during their marriage or relationship that changes the default rules. Before entering into any legal contract that affects a person’s property rights, an individual may wish to have the agreement looked over by a family lawyer.

Source: Justice BC, “What happens to family property when spouses separate?“, June 17, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Deciding who gets to keep the pet after a divorce

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Monday, April 28, 2014.

British Columbia couples often argue over the division of marital property during a divorce. Few pieces of property elicit as emotional a reaction as pets, however. Determining who gets the family pet after a marriage ends can be a tricky subject, but courts generally look at a few factors to make their rulings.

Under the law, pets are seen as pieces of property. This means that if a pet was owned by one spouse prior to the marriage, it will usually count as non-marital property and be owned by that spouse after the marriage. Also, if a prenuptial agreement shows who will own the pet after divorce, this will usually dictate custody.

When these do not apply, a judge will generally have to make a ruling. The factors that a court may consider in order to determine pet custody include which spouse would be better equipped to care for the pet. If a spouse has a job that takes him or her away from home often or has a schedule that is inconsistent, this can count in the judge’s decision. If a spouse has been the primary caretaker of a pet, though, this can generally weigh in his or her favor. Showing proof that one spouse buys the pet food and other supplies, takes the pet for walks or is the one to take the pet to the veterinarian can go a long way toward that spouse retaining custody.

A lawyer may be able to help throughout this process, whether in negotiating who gets custody of a pet or any one of the numerous divorce legal issues. The lawyer may be especially useful during the valuation and division of property stages in order to help ensure a fair asset division.

Source: Forbes, “How Are Pets Handled In Divorce?“, Jeff Landers, April 17, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Court could order billionaire to share assets

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Sunday, March 30, 2014.

The billionaire owner with a controlling interest in Continental Resources Inc., an oil company, could find the appreciation of his stock classified as a marital asset in a case that family lawyers in British Columbia are watching with interest. Although the stock itself was obtained prior to his marriage and is not counted as a marital asset, an Oklahoma judge reported that he was waiting to make a decision on the increased value of 125 million stock shares.

The 69-year-old billionaire was relieved that the preliminary ruling gave him the right to keep the stocks in the divorce. However, they could require him to divide the earned income from the stocks, which could be billions of dollars. His lawyer did not comment on the case. Bloomberg listed the man in the top 50 of richest people in the world.

The couple were married for 26 years when they submitted divorce paperwork in 2012. They did not have a pre- or post-marital agreement. One lawyer commented on the stocks in the case and the court’s decision. He explained that Oklahoma law will look at if either party contributed to the growth of the asset instead of allowing market conditions to increase its value. He added that the involvement could mean the court decides that the stocks are a marital asset and need to be shared by both parties. The stocks were originally sold for $15 in 2007 but are now worth $120.46, which was an increase of more than $13 billion.

During a divorce, the division of assets can be challenging and stressful for both parties. A family lawyer might be able to help clients who are seeking a fair division of assets with an equitable divorce settlement.

Source: Bloomberg, “Continental Resources Founder’s Stake at Risk in Divorce“, Brendan Coffey, March 19, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370