What Is Excluded Property in British Columbia and Is It Divided?

Maybe you owned a condo, savings or an investment account before the relationship began, or a relative left you money. When a relationship ends, one of the first worries is whether those assets go into the pot to be divided.

British Columbia law separates family property from excluded property. Excluded property is usually kept by the person who owns it, but there are limits, and you may have to prove what you say is excluded. This article explains the basics in plain terms.

This article covers the law of British Columbia.

How family property and excluded property fit together

Under the Family Law Act, unless an agreement or order says otherwise, spouses are equally entitled to family property and equally responsible for family debt. 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.

That includes business interests, income tax refunds, money in bank accounts, and entitlements under pensions and retirement savings plans. Excluded property is the main carve-out from that general rule.

What counts as excluded property

The Family Law Act lists the categories of excluded property. They include:

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

The relationship begins on the earlier of the date the couple moved in together in a marriage-like relationship or the date of marriage. That date matters, because it is the line between "before" and "during" the relationship.

There are exceptions. Settlements, damages and insurance money are not excluded to the extent they compensate for a loss to both spouses or for lost income, and property insurance proceeds are not within the insurance exclusion.

Proving it and keeping it excluded

The spouse who says property is excluded is responsible for demonstrating that it is. Good records make a real difference.

Adding your spouse to the title of an asset does not by itself change its excluded status, because excluded status applies despite a transfer of legal or beneficial ownership between spouses. Even so, how an asset was handled during the relationship can raise other questions, so it is worth getting advice.

• Account statements showing balances at the start of the relationship
• Purchase or title documents with dates
• Estate documents or letters showing an inheritance
• Records of gifts and who gave them
• Settlement or insurance paperwork

When excluded property can still be shared

The increase in value of excluded property since the later of the start of the relationship or the date you acquired it is itself family property and is shared. Our companion article on pre-relationship homes looks at this in more detail.

The excluded property itself can be divided only in narrow cases: if it cannot practically be divided outside British Columbia, or if not dividing it would be significantly unfair. Government guidance gives examples such as long interdependent relationships, or family property located outside the province that cannot easily be divided.

Trusts are a special case. Trust property a spouse contributed is family property if, for example, the spouse is a beneficiary with a vested interest not subject to divestment, can transfer the property to themselves, or can end the trust and have the property revert to them.

Spouses can also agree in writing to change what is included or excluded.

What to do next

A proceeding to divide property must generally be started no later than 2 years after the divorce judgment for married spouses, or after the date of separation for spouses in a marriage-like relationship. That time limit is suspended while the spouses are in family dispute resolution with a professional or a prescribed process.

If you go to the Supreme Court, you will complete a financial statement in Form F8. Start gathering your records now, then speak with a lawyer about how your assets are likely to be classified.

Frequently asked questions