Part 1: Whose property is it anyway?

Entering into a new relationship or ending a current one? One thing you may want to think about is how either of those events affects the property you own, or may acquire, during the relationship.

This may be especially important for later marriages when both spouses have substantial assets and their own children they want to leave those assets to. But it can also be important for young couples who start their life’s journey together, especially if one expects to receive gifts or an inheritance in the future.

So while British Columbia’s family law is fairly new, and how it is interpreted by the courts is still evolving, there are some basic principles.

In part one of this blog, we’ll set out what property the law generally says belongs to both spouses and what doesn’t. In part two, we’ll discuss how a spouse may lose the right to sole ownership of property and how to ensure that doesn’t happen.

Part 1: What is family property and what isn’t?

 The Family Law Act describes property – which can include real estate, investments and the family car, among other things – as either being family property or excluded property. Family property is generally shared by the spouses if they separate, whereas excluded property is not.

Family property

Family property is all property earned or acquired by a spouse during the “spousal relationship.” The spousal relationship begins on the earlier of the date the parties start living in a “marriage-like relationship” or the date of marriage. It ends on the date the parties separate, which occurs when either spouse decides that the spousal relationship has ended.

Note that in the case of non-married parties, the spouses must be living in a marriage-like relationship for at least two years to qualify as “spouses” for the purpose of the property division provisions in the Family Law Act.  It is also important to note that people don’t have to live together to be in a “marriage-like relationship”. A “marriage-like relationship” can also include relationships where the parties don’t live together but are intimate, celebrate holidays together, vacation together, have pets or children together, and share finances and household and family duties.

Excluded property

If property falls within the definition of “excluded property” the property is normally not shared by the spouses if they separate.

There are eight categories of excluded property, with the three most common being (1) property owned by a spouse prior to the spousal relationship; (2) gifts to one spouse from a third party; and (3) inheritances received by one spouse.

Note that if a spouse’s excluded property increases in value during the spousal relationship, that increase will be “family property” and split between the parties equally. Only the value at the time the relationship started is excluded.

 In the next blog we’ll look at when excluded property becomes family property by the person losing their exclusion.

Have questions about what is included in family property? Please contact us!

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NOT LEGAL ADVICE. Information made available on the Connect Family  Law website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. One of our lawyers would be pleased to discuss any specific legal concerns you may have.