Navigating the Family Property Act in Alberta

In Alberta, the division of property upon separation is governed by the Family Property Act. This legislation outlines the principles and procedures for dividing assets and liabilities acquired during the course of a marriage or common-law relationship (which in Alberta is called an adult interdependent partnership). However, there are certain exemptions to this division process that individuals should be aware of to ensure they understand their rights and obligations. In this blog post, we explore some of the key aspects to family property division in Alberta.

Family Property

Family property refers to all of the assets and liabilities owned by spouses or adult interdependent partners (“AIPs”). The basic starting point is that all assets and liabilities acquired by individuals while married or in an AIP relationship shall be divided equally between the parties. The date for valuation of assets and liabilities for the purpose of division is at trial, and not at separation.

Exempt Property

Not all assets are subject to division upon separation or divorce. The Family Property Act at section 7(2) specifically excludes certain types of property from the division process. This includes assets owned by a spouse or AIP prior to the marriage or relationship, gifts from a third party received by a spouse or AIP during the relationship, inheritances, and certain types of insurance claims. These assets are generally considered the exclusive property of the individual who acquired them and are not subject to division. We do note that the increase in value of excluded assets is divisible property.

Property Agreements

Parties in a marriage or adult interdependent partnership can enter into agreements that determine how their property will be divided in the event of divorce or separation pursuant to section 37 of the Family Property Act. These agreements, often referred to as prenuptial agreements of cohabitation agreements, allow individuals to outline their own terms for property division rather than relying on the default rules set out in the Family Property Act. However, for such agreements to be legally enforceable, they must meet certain requirements under s.38, including that the agreement must be in writing, that both parties have to acknowledge the nature and effect of the agreement separately from each other, and each party shall obtain independent legal advice.

Unequal Division

Under s.8 of the Family Property Act, in some cases, a court may order an unequal division of family property based on factors such as length of relationship, the contributions made by each party to the acquisition of assets, and any economic disadvantages suffered by one spouse as a result of the relationship or its breakdown. This allows for a more flexible approach to property division that takes into account the unique circumstances of each case.

There are some situations where the division of property may be affected by special circumstances. For example under s.8(l), if one spouse dissipated or wasted family assets, such as through excessive gambling or reckless spending, the court may adjust the division of property to compensate the other spouse for their loss. Similarly, if one spouse contributed significantly to the increase in value of the other spouse’s property, they may be entitled to a share of that increase.

Conclusion

Navigating the complexities of property division upon separation or divorce can be challenging, but understanding the framework for property division in Alberta is essential for ensuring fair and equitable outcomes. Whether through exempt property, property agreements or unequal division, individuals can take steps to protect their assets and rights during this process. Consulting with a knowledgeable family lawyer can provide further guidance and assistance in navigating these issues and reaching a resolution that is fair in your circumstances.