An amendment was made to the Matrimonial Property Act.
This amendment took effect January 1, 2020
- The amendments to the Matrimonial Property Act extend its rules to include adult interdependent partners. This will make it easier for unmarried partners to divide their property if their relationship breaks down. The following changes came into force on January 1, 2020:
- rename the Matrimonial Property Act the Family Property Act
- amend the act to apply to both adult interdependent partners as well as spouses
- allow partners to draft their own property division agreement rather than following the rules in the legislation
- specify that property division rules will apply to property acquired after beginning a relationship of interdependence; this applies to adult interdependent partners and married couples who lived together prior to marrying each other
- give each adult interdependent partner 2 years from the date they knew (or should have known) their adult interdependent relationship ended to make a claim for property division
- clarify that partners can enter into a property ownership and division agreement that applies both during cohabitation (living together before marriage) and the time after marriage
- agreements made during cohabitation would not apply after marriage unless that is the clear intention
- Existing property division agreements that were enforceable under the law when they were signed will still be enforceable.
Alberta’s Family Property Act attempts to divide property fairly between married spouses when they separate and/or divorce. The Family Property Act deals with division of property, possession of the family home, use of household goods, and general law and procedure.
An application to divide property under the Family Property Act can be made by itself or with another application (such as divorce). A spouse can make an application if he/she has separated but not yet divorced, or if he/she has begun divorce proceedings.
If spouses are separated (but not yet divorced) or if spouses have not begun divorce proceedings, the application must be made within two years from the date of separation. If a divorce judgment has been given, any application for property division under the Family Property Act must also be made within two years. If a spouse is suspected of selling or giving away property (i.e. to keep it from the other spouse) legal action must begin within one year of the date the property was sold or given away. The Court may order the spouse who sold or gave away the property to account to the other spouse, and may give relief by way of an uneven distribution of the remaining property.
Division of Property
“Family Property” is all property acquired by spouses during the relationship regardless of whose name it is in. Generally, family property is divided equally between spouses when a relationship ends, unless the result would be unfair. Certain kinds of property acquired before the relationship may not be divided when a relationship ends. This is called “exempt property”. However, sometimes the increase in value of exempt property may be considered “family property”. Nonetheless, this increase in value may not automatically lead to an equal split. The Court will make a decision based on what is just and equitable.
Property which may be divided includes, but is not limited to:
- The family home;
- Household goods (this includes almost all personal property used by family members);
- R.R.S.P. and employment pensions;
- Business interests;
- Investments, stocks, bonds;
- Cars; and
- Other property that has been purchased during the relationship or brought into the relationship, or used for the mutual benefit of the spouses.
Property which may not be divided includes:
- Property acquired by one spouse before the relationship;
- Property one spouse received as a gift;
- Property one spouse received by inheritance;
- An award or settlement for damages in tort law in favour of one spouse (i.e. money paid for pain and suffering in an automobile accident) unless the award was meant to compensate both spouses.
No claim by the other spouse can be made on the property listed above, unless it has been brought into the relationship. An example of this would be taking a home purchased by one spouse before the relationship and putting it under both spouse’s names.
Division of Pensions
As noted above, pensions are considered property under the Family Property Act. Certain pensions may have legislation that determines how the pension will be divided when a relationship ends. Contact your pension administrator to find out if this kind of legislation applies to you.
Matters To Be Considered In The Distribution Of Property
The Family Property Act requires the Court to be fair in determining what each spouse’s share of the property will be. Equal division of property will usually take place unless there are very good reasons presented to the Court that this should not be the case. When spouses cannot agree on how property will be split, the judge will consider spousal contributions to the relationship, contributions to the family, business endeavours, financial resources of both spouses, the length of the relationship, as well as any agreements made. The judge may also consider whether a spouse transferred or sold property, previous Court orders, tax liability one spouse may incur as a result of the transfer/sale of property, and any other relevant circumstances. The Court will not consider misconduct by a spouse, unless it relates to the improper use or sale of family property.
Property Held Outside Alberta
The Family Property Act allows the Court to consider property held outside the province when dividing family property but cannot make any orders relating to it. The Court may divide property within Alberta in a way that ensures an equal distribution of all the family property.
Possession of the Family Home
“Family home” is broadly defined as a house, a part of a house, a part of a business being used as a house, a mobile home, a condominium, or a suite. The family home must be owned or leased by one or both spouses and must be occupied as the family home (i.e. this does not include a summer cottage). The home must be located in Alberta.
A spouse can also apply for an order giving him/her exclusive use of household goods. “Household goods” are defined as personal property owned by at least one of the spouses and used or enjoyed by either spouse or the children – for transportation, household use, educational use, recreational use, social use, or aesthetic purposes. Household goods include motor vehicles, furniture, and appliances. The Court can make this order for any amount of time that the Court thinks is necessary.
The Court may grant an “exclusive possession order”. An exclusive possession order essentially allows one spouse to keep the other out of the house. This is ordered when spouses cannot live together peacefully, but neither is willing to leave the home. This application may be made “ex parte” (i.e. without telling the other spouse) if the Court finds that there is potential danger to the spouse making the application or to a child living in the home.
In granting the order, the Court may do one or more of the following:
- Direct that a spouse be given exclusive possession of the home (regardless of whose name the property is in);
- Direct that a spouse be evicted from the family home;
- Stop a spouse from entering or going to the family home.
When deciding whether a possession order will be granted, the Court will consider the following:
- Whether each spouse can find and maintain another place to live;
- The needs of any children living in the home;
- The financial position of each spouse;
- Property of either spouse; and
- Any existing Court orders regarding child or spousal support.
The person applying for the order must prove that the Family Property Act guidelines have been met, and that there is good reason for the order (i.e. not that it is simply a matter of convenience). Note that an exclusive possession order does not change legal ownership of the property. This means that a person may have the right to stay in the house but it is still considered family property that may be divided by the Court at a later date.
Under the Family Property Act the Court can only grant an order to prevent a person from entering or visiting the home. If one spouse is harassing the other, he/she has some options:
An Emergency Protection Order (EPO) is designed to protect individuals against immediate violence from family members. The order can prevent a family member from contacting each other. This order is served by the police and lasts for up to one year. A violation of the order may result in a criminal conviction and an even longer protection period. Note also that changing the terms of the EPO does NOT change the terms of criminal restraints (such as a probation order).
In addition to the above, one may also apply for a restraining order. A lawyer may be needed, and one will have to show a real or suspected danger to one’s safety. A restraining order can be attached to another action (such as a divorce) or applied for on its own. The Respondent must be served with a copy of the order, and an automatic review will take place two weeks later at the Court of Queen’s Bench. The applicant and the respondent will likely have to attend this hearing. The order should specifically mention all the places the respondent may try to initiate contact (i.e. workplaces etc.).
The restraining order should give the police the power to make an arrest if the conditions are not followed (i.e. it should say that the police “shall” make an arrest, not “may” make an arrest). A copy of the restraining order should be kept readily available, in case the police need to see it. It should be registered with the police so law enforcement officials can have immediate access to it if necessary.
Remember that these kinds of orders are not to be used for alternative purposes (such as an attempt at gaining the upper hand in divorce proceedings). Filing an application based on a false statement can result in a charge of contempt or a fine.
Marriage and Separation Agreements
One may make an agreement with his/her spouse regarding how property will be divided in the event of a separation and/or divorce. To be valid, the agreement must:
Be in writing;
Have been entered into freely and not have been forced by the spouse or some other person;
Show that each spouse had independant legal advice about the effects of signing the agreement. That means that each spouse must execute the agreement with a different lawyer.
Creating a separation agreement will allow the parties to contract out of the Family Property Act. That means that the Family Property Act will not apply to their property. The spouse must understand that they are giving up their right to future claims– this right is being replaced with the agreement.
It is important to note that the Court will not enforce an agreement that it considers to be “unconscionable”. An agreement would be unconscionable if one spouse was unable to properly protect his/her own interests at the time of the agreement. Examples of an unconscionable agreement may include taking advantage of a spouse that cannot afford legal advice or lying about property to induce an agreement.
In order to prevent a spouse from selling property while an action is in the works, one may wish to register with the Registrar of Land Titles in the area in which the land is located. You can also apply for an injunction to freeze your spouse’s assets. See a lawyer immediately if you think that is necessary.