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Learning about division of property

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Wednesday, September 10, 2014.

British Columbia has certain default provisions in place to help establish how marital assets can be fairly distributed between each spouse in a divorce. For spouses who do not wish to resort to these default rules, a prenuptial or postnuptial agreement may be put in place. In the absence of such an agreement, marital property and debt must be divided according to established rules.

One general rule is that nearly every type of asset is subject to division, including the increased value of assets that were owned before a spouse was married. There are a few exceptions, however, such as inheritances or gifts that were received from a party other than the other spouse. While courts are bound to adhere to default rules in many situations, spouses may be able to reach an alternative agreement that works best for them through the process of mediation or private negotiation. In addition to dividing specific assets, spouses may also consider whether spousal support should be included in their agreement in order to help compensate for the non-financial contributions of one of the spouses.

One of the most important components of the divorce process is evaluating assets that must be divided so that each spouse winds up with about the same value of assets as the other. Certain assets may be more difficult to evaluate, such as businesses. Our firm focuses on other practice areas, such as commercial law and estate planning, so we are able to consider how different financial arrangements may affect clients’ lives in the future.

Dividing property can be a complex process that may require the testimony of experts regarding the value of certain assets. If you would like more information on the legal rules regarding the division of property, please read our page on this topic.

Source: Laughlin & Company, “Division Of Property“, September 04, 2014

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

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

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

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