Are Gifts Family Property When You Separate in British Columbia?

When a relationship ends, many people worry about the things they were given: money from a parent, a family heirloom, a wedding present, a piece of jewellery. You may wonder whether your spouse can claim half of something that was meant for you alone.

In British Columbia, the answer depends on who gave the item, when you received it, and what has happened to it since. This article explains the general rules and how a spouse can show that something is excluded. It is not legal advice, and your own facts matter.

This article covers the law of British Columbia.

The starting point: family property and excluded property

Under the Family Law Act, spouses are generally equally entitled to family property unless an agreement or order says otherwise. Family property is everything the spouses own, separately or together, on the date of separation, and it does not matter whose name it is in.

Excluded property is the main carve-out. It is generally not divided, and it includes the following:

• Property acquired before the relationship began.
• Inheritances.
• Gifts from a third party.
• Most settlements or damages for injury or loss, and certain insurance proceeds.
• Property derived from any of these.

Gifts and wedding presents

A gift from a third party, such as a parent, grandparent, relative or friend, is on the list of excluded property. That is the reason a gift from your family will often stay with you on separation.

Wedding gifts are less clear-cut. A present from a guest who is not one of the spouses is generally a gift from a third party, which is on the list of excluded property. Property derived from a gift can also be excluded, and the spouse claiming the exclusion must demonstrate it. Cash that was deposited into a joint account, for example, raises its own questions. These are fact-specific points worth checking with a lawyer.

Gifts between the spouses themselves are a different situation from gifts from a third party, and the rules above refer only to third-party gifts. If the item was given by your spouse, get advice before assuming it is yours alone.

Jewellery and heirlooms

How the rules apply to a piece of jewellery depends on its history, so the questions are practical ones. Who gave it, and when? Was it acquired before the relationship began? Was it an inheritance or a gift from a third party? If the answer is yes to any of these, it may be excluded property.

Excluded status is also not lost simply because ownership moved between the spouses. The Act says the exclusion applies despite any transfer of legal or beneficial ownership between spouses. Property that is derived from excluded property can also be excluded.

Proving a gift is excluded

The spouse who claims that property is excluded is responsible for demonstrating it. If you cannot show where an item came from, it may be treated as ordinary family property.

Helpful evidence often includes:

• Bank records showing a gift or inheritance being received.
• Letters, cards or messages from the giver that explain the gift.
• Appraisals, receipts or photographs, particularly for jewellery and heirlooms.
• Records showing where gifted money went, so you can trace it.
• Statements from the person who gave the gift, if they are willing.

Money can be hard to trace once it is mixed with other funds, so keeping gifted money separate matters. Property derived from excluded property can still be excluded, but you need to be able to show the link.

Exceptions that catch people out

Excluded does not always mean completely untouched. The increase in value of excluded property since the later of the start of the relationship or the property's acquisition is itself family property and is shared. The government gives an example: a house worth $300,000 when the spouse moved in and $500,000 at separation leaves the owner the original $300,000, and the $200,000 increase is shared.

There are also narrow situations where excluded property can be divided. The court can do so only if the property cannot practically be divided outside B.C., or if not dividing it would be significantly unfair. Government guidance points to long interdependent relationships as one example.

Settlements, damages and insurance money are not excluded to the extent they compensate for loss to both spouses or for lost income. Spouses can also agree in writing to treat items differently from the default rules.

What to do next

• List the gifts and heirlooms you believe are yours, with the date each was received.
• Gather the documents that show where each item came from.
• Note whether any gifted money was put into a joint account or used for the family home.
• Check for any written agreement with your spouse that changes the usual rules.
• Keep an eye on time limits, which can run from the divorce order or the separation date depending on your situation.
• Speak with a lawyer if the value or the history of an item is disputed.

Frequently asked questions