What is Family Property?
In Alberta, family property includes the assets and debts that married spouses or adult interdependent partners acquire during their relationship. Since January 1, 2020, these matters have been governed by the Family Property Act. This can include real estate, vehicles, bank accounts, investments, pensions, business interests, and personal property, as well as debts such as mortgages, loans, lines of credit, and credit cards.
Family property is generally divided equally when a relationship ends, unless there is a valid agreement in place, such as a prenuptial or cohabitation agreement. In some cases, a court may order an unequal division of property or debt, depending on the circumstances.
For couples who lived together before marriage, property acquired during that period of cohabitation may also be treated as family property and divided under the Family Property Act.
The Family Property Act (Alberta)
In Alberta, the Family Property Act (Alberta) sets out the rules for family property division when a marriage or adult interdependent relationship ends. The Family Property Act also allows couples to negotiate their own family property division settlement agreement instead of going to court.
The Family Property Act (Alberta) applies to married spouses or adult interdependent partners who separated on or after January 1, 2020. If the parties were married and separated before January 1, 2020, the old Matrimonial Property Act (Alberta) may apply to their situation. If the parties were in an adult interdependent relationship and separated before January 1, 2020, their claims would rely on the old common-law remedies including the law of unjust enrichment, the doctrines of implied, resulting, and constructive trust, and quantum meruit for property division.
Application by a Spouse
A spouse may apply to the court for a Family Property Division Judgment only if:
- the habitual residence of both spouses is in Alberta, whether or not the spouses are living together,
- the last joint habitual residence of the spouses was in Alberta, or
- the spouses have not established a joint habitual residence since the time of marriage but the habitual residence of each of them at the time of marriage was in Alberta.
If a Statement of Claim for Divorce is issued under the Divorce Act (Canada) in Alberta, the plaintiff or the defendant in the divorce action may apply for a Family Property Judgment.
Time to Apply
An application for a Family Property Division Judgment can be started by a spouse on or after the date divorce proceedings have begun. If a Divorce Judgment has already been granted, a spouse must file an application for the division of family property within 2 years after the Divorce Judgment was granted, or the claim will expire.
Conditions Required for a Spouse to Apply
A Family Property Division Judgment may only be made:
- if
- a judgment of divorce has been granted, or
- a declaration of nullity has been made out with respect to the marriage,
- if the court is satisfied 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,
- if the court is satisfied the spouses are living separate and apart at the time the application is commenced, and the defendant spouse:
- has transferred or intends to transfer substantial property to a third party who is not a bona fide purchaser for value, or
- has made or intends to make a substantial gift of property to a third party, with the intention of defeating a claim to property a spouse may have under this Part, or
- if the court is satisfied the spouses are living separate and apart and one spouse is dissipating property to the detriment of the other spouse.
- if one or both spouses have obtained a declaration of irreconcilability under the Family Law Act (Alberta).
Application by an Adult Interdependent Partner
An adult interdependent partner may apply to court for a Family Property Division Judgment only if:
- the habitual residence of both adult interdependent partners
is in Alberta, whether or not the adult interdependent partners are living together, - the last joint habitual residence of the adult interdependent partners was in Alberta, or
- the adult interdependent partners have not established a joint habitual residence since becoming adult interdependent partners but the habitual residence of each of them at the time they became adult interdependent partners was in Alberta.
Time to Apply
An application for a Family Property Judgment must be started within 2 years after the date the applicant first knew, or ought to have known, the applicant had become a former adult interdependent partner, or within 1 year after the other adult interdependent partner has wrongly transferred or gifted family property to a third party. If a former adult interdependent partner fails to file an application for property division within 2 years after becoming a former adult interdependent partner, the relationship ends, their claim will expire.
Conditions Required for an Adult Interdependent Partner to Apply
A Family Property Division Judgment in respect of adult interdependent partners may only be made:
- if they have become former adult interdependent partners,
- if the court is satisfied that the adult interdependent partners are living separate and apart at the time the application is commenced and the defendant adult interdependent partner:
- has transferred or intends to transfer substantial property to a third party who is not a bona fide purchaser for value, or
- has made or intends to make a substantial gift of property to a third party, with the intention of defeating a claim to property an adult interdependent partner may have under this Part, or
- if the court is satisfied that the adult interdependent partners are living separate and apart and one adult interdependent partner is dissipating property to the detriment of the other spouse.
Former Adult Interdependent Partners
Adult interdependent partners become former adult interdependent partners when one the following events occurs:
- the adult interdependent partners enter into a written agreement that provides evidence that the adult interdependent partners intend to live separate and apart without the possibility of reconciliation.
- the adult interdependent partners live separate and apart for more than one year and one or both adult interdependent partners intend for the adult interdependent relationship to end.
- the adult interdependent partners marry each other or one of the adult interdependent partners marries a third party.
- one of the adult interdependent partners enters into an adult interdependent partner agreement with a third party; or
- one or both adult interdependent partners obtain a declaration of irreconcilability under the Family Law Act (Alberta).
Property Exemptions
The Family Property Act (Alberta) lists four categories of exempt property, which are not divisible upon divorce or the end of an adult interdependent relationship. These exemptions are:
- the value property owned by one of the parties prior to the relationship up until the time the relationship begins.
- gifts from third parties.
- proceeds from settlement or judgment arising from a tort claim (loss due to personal injury); and
- proceeds of a life insurance policy.
Any increase in the value of any exempt property is treated as property that is divisible between the parties. Exemptions can also be lost or diminished if the exempt property is not fully traceable during the period of the relationship. Adding a spouse to the title of exempt property will reduce the value of the exemption. The party claiming an exemption has the onus of proving the exemptions.