THE DIVISION OF PROPERTY SHARED BY SPOUSES AND PARTNERS
The topics in the Dial-A-Law series provide general information on legal issues within the Province of Alberta. The purpose of this topic is to inform you of your legal rights and responsibilities. This is not legal advice. If you require legal advice, you should contact a lawyer.
This topic discusses how to divide your property after the breakdown of a marriage or eligible relationship.
You and your spouse or partner are required to divide matrimonial property that has accumulated over your marriage. Some property may be exempt. Some property might be shareable on an other-than-50/50 basis. Most property and debt are divided 50/50. Neither the Matrimonial Property Act nor the Family Property Act uses “fault” as a way to evaluate each spouse’s entitlement to division of property.
In order to determine whether the Matrimonial Property Act or the Family Property Act applies to your relationship, please scroll to the topic ‘Property Shared by Spouses or Life Parners’.
There are 2 methods you may use to divide your shared property:
- You and your spouse can agree on the division of your property and have a lawyer draw up a contract to record the agreement.
The contract that provides the details of your property agreement may be called a Separation Agreement, a Separation Contract, a Divorce and Property Contract or Minutes of Settlement. You and your spouse or partner are required to have independent legal advice regarding the agreement for division of property. Each lawyer will sign a certificate of independent legal advice after reviewing the contract with you. Certain rights are provided for each person under the Matrimonial Property Act or the Family Property Act and you must be made aware of these rights. Your lawyer will tell you what rights you have under the law and what rights you can sign away. There are some rights which you cannot contract away. For example, you cannot contract out of the right to ask the Court for the exclusive use of the matrimonial home if required in future.
You should consult with a lawyer to protect your rights, ensure you understand what rights you may or may not be giving up, and to ensure the contract is prepared so that it is legally binding. For example, the contract must be in writing and must be consensual. You and your spouse or partner must have the mental capacity to enter into a contract Full disclosure of all property owned by each spouse must be made. You must be informed of all property owned, and debts owed by your spouse or partner and you must disclose all of your property and debt to your spouse or partner. The contract must be signed separately by each person in front of his or her lawyers and each lawyer must sign a Certificate confirming that they gave independent legal advice before you signed the contract. If you do not meet all the requirements of the Act for proper execution of the contract, it can be challenged.
- If you and your spouse or partner cannot agree, then you may bring an application to the Court of Queen’s Bench for an Order for the distribution of your matrimonial property.
Should the Matrimonial Property Act apply to your relationship and before you can apply to the Court, you must both have been habitually resident in Alberta at the time of your marriage, or at the end of your marriage. You start your legal action by filing a Statement of Claim at the Court of Queen’s Bench. If you are getting a divorce you may bring the claim for matrimonial property action at the same time, or you may start either one first, provided that an application for an order for the distribution of your matrimonial property may only be made if:
- A judgment of divorce has been granted, or a declaration of nullity of marriage has been made with respect to the marriage; or
- If one of the spouses has been granted a judgment of judicial separation; or
- If one or both of the spouses have obtained a declaration of irreconcilability under the Family Law Act; or
- If the Court is satisfied that the spouses have been living separate and apart for a continuous period of at least one year immediately prior to the commencement of the application; or
- If the Court is satisfied that the spouses are living separate and apart at the time the application is commenced and the defendant spouse has or intends to transfer property with the intention to defeat a claim to the property transferred or to disadvantage the other spouse;
- There are certain exceptions to the requirements set out above.
There are important time limitations you must consider when making a claim for property distribution. If you start and complete your divorce proceedings without a property distribution claim, you must bring the property distribution claim within 2 years of the granting of the Divorce Judgment. If[MR1] you have not started your divorce proceedings, you may bring the application within 2 years from the date upon which you separated from your spouse or within 1 year from the date upon which your spouse gave away or transferred property under circumstances as set out in point 5 above, whichever occurs first.
You and your spouse must provide a Statement of all property you own alone or with another person to the Court and to the other spouse. The Statement must include the property that was sold or given away within the 1 year prior to the application for property distribution.
Once an action has been started, neither spouse may dispose or encumber of any property without an Order of the Court or the consent of the other spouse. Either spouse cannot make a gift, or transfer the property to anyone else before the Court makes the Order. If one spouse has given any property away or transferred any property with the purpose of defeating a claim or to the disadvantage of the other spouse, and the person to whom the gift or transfer was made knew or should have known the reason for the gift or transfer, the Court may order that the person who received the gift or transfer must return the gift or transfer to the innocent spouse.
The[MR2] Court may make an order relating to the distribution of all property, regardless of which spouse owned it. A Court may:
- order that a spouse to pay money or transfer an interest in property to the other spouse;
- order that property be sold and that the proceeds be divided between the spouses as the Court directs;
- by order declare that a spouse has an interest in property notwithstanding that the spouse in whose favour the order is made has no legal or equitable interest in the property.
- order a spouse to pay money over a period of time with or without interest;
- order a spouse to give security for all or part of any payment;
- charge property with all or part of a payment to be made under the order and provide for the enforcement of that charge;
- prescribe the terms and conditions of a sale ordered;
- require a spouse, as a condition of an order, to surrender all claims to property in the name of the other spouse;
- require a spouse, as a condition of an order, to execute a release of dower rights under the Dower Act with respect to all or any property owned by the other spouse or transferred to the other spouse;
- impose a trust in favour of a spouse with respect to an interest in property;
- vary the terms of an order made under subsection (2) in accordance with this subsection;
- if property is owned by spouses as joint tenants, sever the joint tenancy;
- make any other order that in the opinion of the Court is necessary.
The Court will take the following factors into account in making an order:
- the contribution made by each spouse to the marriage and to the welfare of the family, including any contribution made as a homemaker or parent;
- the contribution, whether financial or in some other form, made by a spouse directly or indirectly to the acquisition, conservation, improvement, operation or management of a business, farm, enterprise or undertaking owned or operated by one or both spouses or by one or both spouses and any other person;
- the contribution, whether financial or in some other form, made directly or indirectly by or on behalf of a spouse to the acquisition, conservation or improvement of the property;
- the income, earning capacity, liabilities, obligations, property and other financial resources that each spouse had at the time of marriage, and that each spouse has at the time of the trial;
- the duration of the marriage;
- whether the property was acquired when the spouses were living separate and apart;
- the terms of an oral or written agreement between the spouses;
- that a spouse has made a substantial gift of property to a third party, or a transfer of property to a third party other than a bona fide purchaser for value;
- a previous distribution of property between the spouses by gift, agreement or matrimonial property order;
- a prior order made by a court;
- a tax liability that may be incurred by a spouse as a result of the transfer or sale of property;
- that a spouse has dissipated property to the detriment of the other spouse;
- any fact or circumstance that is relevant.
Should the Family Property Act apply to your relationship, an application may only be made if:-
- both partners live in Alberta, whether or not they are living together; or
- the last joint residence of the partners was in Alberta; or
- the partners have not lived together since becoming partners but both partners lived in Alberta at the time they became partners.
The requirements which must be met in relation to the application, the factors which the Court will take into consideration and the powers of the Court is the same as if the Matrimonial Property Act applied.
As is the case with the Matrimonial Property Act, there are important limitations as to the time in which the application may be brought. Should the parties be married, the same limitations as prescribed by the Matrimonial Property Act is applicable. However, if the parties are not married, the following time limits are important:
- The application must be made within 2 years from the date upon which the parties or a party terminated the relationship or a party reasonably ought to have known that the relationship was terminated, if the application is based on the fact that the partnership-relationship has terminated or, the relationship having terminated, one partner is transferring assets to the prejudice of the other partner;
- The application must be made within 2 years from the date upon which the parties or a party terminated the relationship or a party reasonably ought to have known that the relationship was terminated, if the application is based on the fact that one partner is transferring assets to the prejudice of the other partner or with the purpose of defeating a claim under the Family Property Act OR 1 year from the date upon which the gift was made, whichever is the earlier.
In Alberta, the value of your property is determined at the date of the trial. The value of the property at the time of marriage and/or the time when the property was acquired may be excluded from the division in certain circumstances.
[MR1]This portion is inserted as section 6 of the Matrimonial Property Act also provides for division with divorce proceedings having commenced
[MR2]This portion is inserted as someone who intends seeking this relief ought to be informed what kind of orders may follow in terms of section 9 of the Matrimonial Property Act