The division of assets in BC is governed by Part 5 of the Family Law Act. On separation, each spouse is presumed to have a right to half of the family property.
The definition of “spouse” includes unmarried or same-sex spouses, so long as the spouses lived together in a marriage-like relationship for at least two years or had a child together. A person who fails to meet that test might still be able to make a property claim based on the common law principle of unjust enrichment.
What constitutes “family property” might be in dispute. It can include a range of assets:
- property that is in the name of only one spouse,
- shares in a corporation or interest in a partnership,
- property purchased by one spouse with money from the sale of a family asset, or
- future entitlements to money, such as an annuity or a pension.
Certain property is excluded, such as inheritances that were legacies to only one spouse, or property that was acquired by one spouse before the relationship started. However, where one spouse brought property into the relationship and it has grown in value, that increase may be family property to be divided.
After separation, the spouses hold all assets as tenants in common. Although there is a presumption of equal division, either spouse may try to prove that equal division would be unfair because of any of the following factors:
- the duration of the relationship;
- the terms of any agreement between the spouses as to division;
- the contribution of each spouse to the advancement of the other;
- whether either spouse, after separation, caused property to decline in value; or
- any other factor that would make equal division unfair.
No court in British Columbia has jurisdiction to make a vesting order affecting title to real property situated outside the province, although the courts can order that a person effect the transfer.
Spouses may make enforceable written agreements for division of family property. If a spouse wants to have the court set aside such an agreement, the court will consider whether the agreement was unfair in some way, perhaps because one spouse failed to disclose assets, or one spouse failed to understand the agreement’s consequences.
Family debt is divided between the spouses in the same way as family property.