Can We Divide Property With a Separation Agreement in BC?

If you and your spouse already agree on how to split what you own and owe, you may not need a court to do it. A separation agreement lets you record your own deal instead of relying on the default rules.

This article explains what a property agreement can cover in British Columbia, what to think about including, and the limited situations in which a court can set one aside. It is general information, not advice on your situation.

This article covers the law of British Columbia.

Yes, you can divide property by agreement

Without an agreement or order, spouses are equally entitled to family property and equally responsible for family debt under the Family Law Act. That equal split is the starting point, not a requirement. Spouses may agree in writing to divide property and debt equally or unequally, change what counts as included or excluded, or value items differently.

The court makes a division order only when a spouse applies for one. If you settle by agreement, you may never need to make that application.

The rules apply to married spouses and to former spouses. They also apply to people who have lived in a marriage-like relationship for a continuous period of at least 2 years. Having a child together does not by itself make a couple spouses for property division.

What to think about including

A clear agreement leaves little to argue about later. These are common points to work through with a lawyer:

• A list of what each spouse owns, including the family home, RRSPs, investments, bank accounts and pensions, whoever's name they are in.
• Which items are excluded property, such as property owned before the relationship or inheritances, and how any increase in value of that property is treated.
• All family debt, and who will pay each debt. A lender is not bound by your deal, so a debt in one spouse's name stays owed to the lender by that spouse.
• How each item is valued, and as of what date. Unless your agreement says otherwise, family property is valued at fair market value on the date of the dividing agreement or the court hearing.
• How pensions are split. Pension interests that are family property are divided under Part 6 unless an agreement or order provides otherwise.
• Whether a notice of agreement will be filed against land, which then affects later transfers and mortgages.

Why the agreement should be in writing and witnessed

A court cannot override a written, witnessed agreement unless it is set aside under section 93. That gives you real certainty, but it also means you are held to what you sign. A handshake deal or a loose email exchange may not give you the same protection.

Because the agreement is so hard to undo, it is worth understanding what you are giving up before you sign. Getting independent legal advice is a practical way to do that.

When a court can set an agreement aside

A property agreement can be set aside or replaced on grounds in section 93. Examples include:

• One spouse did not disclose something important.
• One spouse took improper advantage of the other.
• A spouse did not understand the nature of the agreement.
• Other circumstances would make the agreement significantly unfair, having regard to the time that has passed, the intent for certainty and any reliance on the agreement.

Honest, full disclosure matters. If a party knowingly failed to disclose relevant information and an agreement is set aside under section 93, the court may order the other party to pay the applicant's family dispute resolution expenses.

There is also a time limit. A separate 2-year window applies to applications to set aside or replace an agreement, running from when the spouse discovered or ought to have discovered the grounds.

What to do next

• Gather recent statements for bank accounts, investments, retirement plans, pensions and debts.
• Gather ownership and mortgage documents for any real property, and the latest property assessment notice.
• Share information openly so no one can later say something was hidden.
• Note your key dates. A proceeding to divide property generally must be started no later than 2 years after a divorce judgment for married spouses, or after separation for spouses in a marriage-like relationship. The time limit is suspended while you are in family dispute resolution.
• Have a lawyer review the draft before you sign, and confirm how it will be witnessed.

Frequently asked questions