Division of Property

As of June 30, 2004, the rules of property division set out in The Family Property Act apply not only to married couples but also to couples who have been in a common law relationship for a period of at least three years. So long as the three year rule of cohabitation has been met, the rights of married and common law couples are the same pursuant to The Family Property Act. A common law couple may register with Vital Statistics to establish this relationship immediately.
With some exceptions The Family Property Act provides that the value of all assets accumulated during the period of cohabitation are shareable upon separation or upon death. The most common exceptions are gifts and inheritances intended to be gifted or bequested to only one of the parties.

Generally assets acquired prior to the commencement of the cohabitation will not be shareable upon separation or death but the increase in the value of an asset generally is shareable.

The term “assets” is defined to include every type of asset such as real estate, personal property, RRSPs, pensions.

Each spouse or common law partner is entitled to full disclosure of all assets and debts and to an accounting. In the accounting process, debts are subtracted from the value of assets prior to any equalization payment being made.

The following is an example:

Wife owns:
Assets: $100,000
Debts: $ 75,000
Net Value of Assets: $25,000

Husband owns:
Assets: $200,000
Debts: $175,000
Net Value of Assets: $25,000

In this example, there would be no equalization payment as the net value of assets for each party is the same. If the net value of assets was unequal, 50% of the difference would be payable by the spouse or common law partner having the higher net value of assets.

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