When there is a breakdown of a relationship, couples are left to figure out how to best divide their assets and how to deal with their debts and other liabilities. If the parties have entered into a Cohabitation Agreement or a Prenuptial Agreement, they may have already pre-determined how their family property will be divided but it a couple does not have such an agreement, they may require some assistance in ensuring that they divide their property and their debts in the most fair and effective manner.
Under Alberta’s Family Property Act, married couples enjoy a presumption of equal distribution of net assets which were acquired during the course of their relationship. However, the Act also provides for a number of possible scenarios where property, or portions of certain property, may not be divisible. It is also important to note that the presumption regarding an equal division of assets does not necessarily apply to how debts will ultimately be divided.
There are special rules that will apply with regard to how certain property is divided. For example, it may be possible to transfer RRSPs from one party to the other in a tax neutral manner in order to avoid having either party cash in his or her RRSPs to equalize property. The division of pensions will often require specific terms to be incorporated into court orders. Often there will be additional issues that arise as to how to properly value certain types of property such as businesses, rental properties or retirement assets.
Prior to January 1, 2020, there were no statutory matrimonial property rights for unmarried couples in Alberta. If you separated prior to January 1, 2020, you may wish to consult with a lawyer as to whether the new Family Property Act will apply to your circumstances.
Having the correct advice and guidance regarding your property division is imperative to ensure that both parties will end up with a fair and equitable settlement.