07/21/2021
DIVISION OF MATRIMONIAL PROPERTY UPON MARRIAGE BREAKDOWN IN ALBERTA
The collapse of a marriage, without more, can be incredibly stressful on its own. It becomes even more daunting where, before and/or during the life of the marriage, the spouses had acquired property, known as matrimonial property in legal parlance.
Although, there is a number of legislation that govern the relationship between spouses and partners in Alberta, however, the only one that governs the division of property upon a marriage breakdown is the Matrimonial Property Act (MPA), (a federal legislation applicable all over Canada); this applies only to spouses who married under the Divorce Act, in other words, those who were legally married, regardless of which country.
In essence, the Matrimonial Property Act is inapplicable to common law partners (those not legally married) whose only recourse is to the Family Law Act and the Adult Interdependent Relationships Act upon separation.
It is super easy if, before or during the life of the marriage, the spouses entered into what is called a pre- or post-nuptial agreement which they have the right to do to make the Matrimonial Property Act inapplicable to them. Where, for whatever reasons, the spouses did not have a pre- or post-nuptial agreement in place, they will, regarding the division of matrimonial property, be willy-nilly governed by the Matrimonial Property Act unless they are able to reach a consent agreement which they can then apply to the court to enter as a Consent Final Order.
The division of matrimonial property through the court can be time consuming, stressful, acrimonious, and pretty expensive, hence the gentle advice for intending couples or married couples to consider doing a pre-or post-nuptial agreement.
Where there is no pre- or post-nuptial agreement in place or the parties are unable a reach an amicable agreement, it will require a summary or full trial by the court to reach a decision on how the matrimonial property will be shared.
There are laid down rules which the court applies to reach a decision such as:
a. The assets and liabilities jointly or individually accrued by the parties during the marriage
b. Assets brought into the marriage e.g., inheritance, gifts from third party, and pre-marriage assets, otherwise collectively called Exempt Property.
The court handles the division of Exempt Property differently from other assets and liabilities which accrued to the parties during the life of the marriage.
While other assets and liabilities are split down the middle between the divorcing parties unless persuaded to do otherwise, the Exempt Property is not. Rather, the court considers the quantum of value the Exempt Property has added since it was acquired, and it is this increased value that is divided between the parties. It is this “capital gain” that the court shares between the spouses in a “just and equitable” manner guided by the following principles:
a. The financial situation of both spouses
b. How long they were married for
c. What each spouse contributed to the marriage
d. Any agreements the spouses made, and
e. If a spouse incurs a tax liability when transferring a home or selling it
It might be needful to insinuate the Alberta Dower Act into this discourse. The Dower Act gives the spouse who is not on title the right to withhold consent for the sale of the matrimonial home from the spouse who is on title. However, once the marriage has broken down either spouse can apply to court to have the matrimonial home sold and the net proceeds held in trust to abide the outcome of the division by the court or the spouse not on title can give consent to the other spouse under an agreement to sell and the net proceeds held in trust to abide the outcome of a court division or agreed division between both.
It is important to bring an application for the division of matrimonial property within 2 years of separation, one year after the property was transferred, or one year after the divorce judgment. This is a mandatory requirement to be able to “arrest” an assigned/transferred matrimonial property. Non- compliance freezes the rights of the applying spouse.
In some instances, one spouse may want to be given exclusive possession of the matrimonial home.
Exclusive possession in this case includes the eviction of the other party from the home and /or the restraining of the other spouse from entering or attending to the home. The court does not grant this application as a matter of course but upon certain variables being present such as the financial position of each party, the needs of the children (especially important), and the availability of other accommodation.
The import of this type of order is not to change the ownership of the property but only to provide a stop gap measure which lasts only for a limited period.
The above piece provides a capsule of the “ how’s” of the division of matrimonial property when a marriage breaks down in Alberta, Canada.
Should you need help with the preparation of a pre-or post-nuptial agreement or the division or matrimonial property using the court, feel free to call me:
Ola OKEDARA
(587,617.8844/587.227.2858)
