Division of Family Assets and Debt

Division of Family Assets and Debt | Disinherited Vancouver Estate Lawyer

LW v FW 2018 BCSC 1924 discusses the legal framework for the division of family assets/property and debt.

In this particular case it was an application for reapportionment of debt in favour of the female spouse.

Section 81 of the FAMILY LAW ACT provides that on separation, each spouses presumptively entitled to an undivided half interest in all family property and is responsible for half of all family debt, unless the reapportionment provisions are engaged.

Family property is defined in section 84 and includes property acquired by a spouse post separation if it is derived from a family asset or assets owned by a spouse at separation.

Family debt is defined in section 86 as all financial obligations incurred by a spouse during the relationship as well as debt incurred after the date of separation if it is incurred to maintain family property. Family property and debt are valid at the time of the hearing or trial, absent a court order to a different effect.

The reapportionment provisions are found in section 95 of the Family Law act which provides the court with the power to reapportion family property or family debt, or both, if it finds an equal division is significantly unfair after having considered the various factors set out in sections 95(2) and (3)

Those factors are:

1) the duration of the relationship between the spouses

2) the terms of any agreement between the spouses, other than agreement described in

3) A spouse’s contribution to the career or career potential of the other spouse

4) –whether family debt was incurred in the normal course of the relationship between the spouses -if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt

5) -whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;

6) the fact that a spouse, other than a spouse acting in good faith,

A) substantially reduce the value of family property, or

B) disposed of, transferred or converted property that is or would have been a family property, or exchanged property that is or would have been family property into another form, causing the other spouses interest in the property or family property to be defeated or adversely affected;

7) a tax liability that may be incurred by a spouses result of the transfer or sale of property or as a result of an order

8) any other factor, other than the consideration referred to in subsection 3, that may lead to significant unfairness.;

The court may also consider the extent to which the financial means and earning capacity of the spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses of, on making a determination respecting spousal support, the objectives of spousal support are under section 161 have not been met.