Property Division in a Divorce
In a recent case in which I have been involved in, the central discussion focused on the actual physical properties this husband and wife had acquired. The couple, whose identities and addresses will be kept confidential, had built up a nice portfolio of buildings and land holdings since their marriage 16 years earlier. The different holdings were mostly held jointly. There were two exceptions to this; one property was acquired by her and the another was acquired by him from money that they both had in their joint savings and Tax-Free Savings Accounts (TFSA’s).
To help the couple, it was important to remind them of how things work in B.C. In a recent course on the topic of Family Property that I completed through the Canadian Institute of Financial Planners (CIFP) the rules about the division of family property apply to both married couples and unmarried couples who have been living together (for at least two years) in the province of B.C. It is important to differentiate between what happens to property when spouses separate as opposed to what happens when a spouse dies.
“Marriage does not give one spouse an automatic proprietary interest in the property of the other spouse. Each spouse is still free to own and control assets registered in his or her own name. However, marriage does create a statutory obligation to share in the value of assets acquired by both spouses during the marriage, and in some jurisdictions, in the value of assets acquired prior to marriage. Essentially, the matrimonial property legislation views marriage as a partnership. When the partnership is terminated, each partner is entitled to receive a share of usually 50% of the community property.” (page 3, Family Property and Other Issues, Canadian Institute of Financial Planners, 2024) ((This quote is generic to Canada, each province has their own unique laws)).
For this divorcing couple, it was valuable for them to understand how the property laws work in British Columbia. This clarity helped to speed up the negotiations that were occurring between them. The old saying, time is money, is especially relevant when engaging the services of accountants, counsellors, lawyers, and financial planners. The fewer things that are contested, the more money there is for each of you and for the kids!
Note: I am in favour of marriage! Healthy and happy families are the primary units of a strong and vital society and should be encouraged to thrive by everyone… individuals, families, churches, community groups, and all levels of government! Like all noble endeavours, it takes hard work, sweat, and tears to make something beautiful and worthwhile! If divorce is the route a couple takes, then make the break clean, quick, and efficient… your financial future depends on it!