Know Your Rights About Splitting Property After Separation
How is a house divided in a divorce? That’s the question we’ll answer in this blog post as well as many other questions about splitting assets after separation.
Everyone feels the need to find that special someone to share their life with. Deep and meaningful connections, whether it’s intimate or platonic, are what make the world a better place. You want to share your world with your partner, and they want to share it back.
Hopefully, most people will get a happily-ever-after. However, sometimes relationships simply don’t work out.
According to Statistics Canada, over 42,000 divorces were granted in Canada in 2020.
If you and your spouse decide that it’s best to divorce or separate, how do you divide assets?
More specifically, how and when can you divide property?
When Can You Divide Your Property After a Separation?
According to the Government of Canada, there’s a significant difference between separation and divorce.
A separation is when a married or common-law couple decides to stop living together. It’s important to note that if you’re married, separation doesn’t officially end the marriage.
A divorce is when the marriage is ended through official court proceedings.
How you can divide your marital property depends on whether you and your spouse separate, or divorce.
Before you start division of property, you and your spouse will need to figure out what your family property is.
What is Family Property?
Family property is everything you and your spouse own on the date you separate.
The exception here is excluded property (more on that later).
Family property not only means your family home, but includes:
- Other land, houses, or condos
- Bank accounts
- Insurance policies
Even if only one spouse’s name is on any of these, the law says it’s still family property. This especially means your family home.
If there is any property you or your spouse owned before you got together that counts as excluded property.
What is Excluded Property in a Divorce?
Excluded property is any property you or your spouse owned before you both decided to get married or live together in a common-law relationship.
That means it is not family property, and you don’t have to equally split the value.
However, like most things, there’s a catch.
If the excluded property increases in value over the course of living together, that increase counts as family property.
That means only the increased value of your excluded property can be divided equally after separation.
In other words, if you owned a property before you started living together with your spouse, when you separate, you won’t have to give them an equal share of its total value.
You will need to give them half of the increase in the house’s value since you started living together.
The excluded property also includes property that you sold to buy a new family property.
Tracing the value of the excluded property can be complicated, so it’s best to hire a professional for this task.
What else is excluded property? Click here for a complete list of what defines the family property and excluded property.
How Does Family Property & Division of Assets Work?
After you and your spouse decide to end your relationship, you’ll need to divide the property you share.
The law calls you and your partner spouses if you are married, or living common-law for at least 2 years.
If you’re married, you may need to share the debts you owe, so it’s a good idea to act quickly when dividing your finances.
In British Columbia, whether you were married or common-law, you must apply to divide property within 2 years after you get an order for divorce or from the date you separated. If you wait too long, you may lose your right to your share of the family property.
When dividing property in a marriage, you and your spouse will equally divide the value of any property you bought during the marriage. You and your spouse will also equally divide any increase in value of the family property you bought into the marriage.
However, there are some exceptions to this rule.
In British Columbia, if a couple wants to divide their family property or debt differently, they can opt-out of the property and debt division rules by making an amicable agreement.
When dividing property in a common-law relationship, the property typically stays with the spouse who bought it. If the other spouse helped buy and take care of the property, they may have a right to part of it.
If you and your spouse can’t come to an agreement on division of property, you may have to go to court.
Whether you and your spouse are married or common-law, you’ll both have to agree to a separation agreement.
What Is A Separation Agreement?
A separation agreement is a legal, written record of how a couple has settled their issues related to their separation.
While you don’t need a separation agreement to separate, it’s much faster and less expensive than going to court.
Hiring a mediator or arbitrator can help you and your former spouse reach an amicable agreement.
This may include:
- How you’ll divide property and debts
- Living arrangements
- Spousal support
- Custody of children
- Child support payments
While you can prepare a separation agreement on your own, it’s a good idea to get legal advice from a divorce lawyer or a notary to help with the process.
Each partner should talk to a lawyer before signing to make sure both parties fully understand the separation agreement.
Before you decide to split your family property, it’s important to get it professionally appraised.
Appraise Your Property Before Property Division
When it comes to the division of assets in a divorce or separation, we at D.Fritz Appraisals understand how important it is to receive a fast and accurate appraisal of your family property.
Based in Victoria, BC and with over 40 years of experience, our team of professionals will find the fair market value of your home, so you can focus on moving forward.
Contact us today!