Division of Matrimonial Property

IT IS NOT ALWAYS “50/50”.

In Alberta, the law regarding division of assets acquired by married spouses is different than the law that applies to common law spouses. It is possible that in some scenarios the outcome will be the same, but the starting presumptions are quite different.

Married spouses are governed by the Matrimonial Property Act, RSA 2000, c M-8 (the "M.P.A."). The simplest application of the M.P.A. leads to the result that all the property that spouses acquire during the time that they are married is divisible equally. It does not matter who legally owns the property.

However, there are some more complicated parts of the M.P.A. that apply to each situation. Legal advice regarding your specific situation should be sought to discuss:

SOME OF YOUR PROPERTY MAY NOT BE DIVISIBLE.

The M.P.A. lists types of assets, called exemptions, that one spouse may be able to keep to themselves. These include: the value of property acquired before the marriage, gifts, inheritances, and certain types of insurance or Court-related awards;

HOW TO VALUE YOUR ASSETS.

The general rule is that you value the assets on a fair market value basis, as of the date of trial or settlement; and

WHETHER THERE IS A POSSIBILITY OF DIVIDING YOUR ASSETS UNEQUALLY.

The M.P.A. allows spouses to come to whatever Contract they want; however, in order for a Contract to be binding each spouse must understand the Contract. The Supreme Court of Canada and the M.P.A. have both tackled the issue of formalities that are required to have a binding Contract. These formalities include: exchange of financial disclosure between the spouses (i.e. each spouse gets to see all the documentation regarding the other person’s assets and liabilities); that the Contract is in writing; that both spouses sign formal acknowledgements as required under the M.P.A. and that each spouse receive legal advice separate and apart from the other spouse and from a different, independent lawyer, with a Certificate completed to that effect.

Common law spouses may not rely on the M.P.A. Whereas the starting presumption under the M.P.A. is that spouses share assets equally, in a common law relationship the starting presumption is that each spouse is entitled to the assets in their own name, and responsible for the debts in their own name. Jointly held assets may be divided equally, or may require that each parties’ financial contribution to acquiring or maintaining the asset be taken into consideration.

In many situations a common law spouse may be entitled to a share of the other spouse’s assets under the legal doctrine of unjust enrichment, which is also sometimes referred to as constructive trust law. The law in this area is very fact specific and constantly evolving; however, the basic analysis starts with determining whether one spouse has benefited financially from the relationship, while the other spouse suffered a corresponding loss of financial position. If you think this type of law applies to you, be prepared to discuss with your lawyer all of the contributions of both spouses during the common law cohabitation.

Contact GDE FAMILY LAW today to obtain more information and advice on how the division of matrimonial property applies to you and your situation.