Is Growth in Value of Pre-Marriage Property Shared in Alberta?

You bought a home or built up investments before the relationship began. Years later, that property is worth much more, and you want to know whether your spouse or partner can claim a share of the increase.

In Alberta, the Family Property Act separates the value you brought in from the growth that happened afterward. This article explains how that works in plain terms and what usually matters in practice.

This article covers the law of Alberta.

The starting point: what you owned before is exempt

The Court may divide all property owned by spouses or adult interdependent partners, whether it is held jointly or by one person. A home held only in your name is therefore still within the Act's reach.

However, the Act exempts property a spouse acquired before the marriage, property acquired before an interdependent relationship began, and property an adult interdependent partner acquired before their relationship began. Gifts from third parties and inheritances are exempt as well.

The Family Property Act is the former Matrimonial Property Act under a new name, and the changes took effect on January 1, 2020. It applies to married spouses and to adult interdependent partners. An adult interdependent partner is someone who has lived with another in a relationship of interdependence for at least 3 years, for less than 3 years with some permanence if they have a child together, or for any period if they have signed an adult interdependent partner agreement.

There is an exception for older separations. Spouses who were divorced, or living separate and apart, before January 1, 2020 generally stay under the old Matrimonial Property Act, although ss. 15 and 18 of the new Act apply if the event or separation was on or after February 1, 2012. For adult interdependent partners, the Act applies only if they had not begun living separate and apart, and had not become former partners, before January 1, 2020.

How the exempt value is fixed

What is exempt is a value, not the whole asset. The exempt value is fixed at the later of the marriage date (or the date the interdependent relationship began, where applicable) and the date the property was acquired.

Because the exemption is tied to that value, keeping good records of what the property was worth at the start of the relationship is practical. The Act does not set out how to value individual assets, so a lawyer or appraiser can help with that.

What happens to the growth

The growth in value of exempt property is the gap between its exempt value and its market value at trial. This also covers property obtained by exchange or from sale proceeds. That growth is not exempt.

It is also not automatically shared equally. The Court distributes it in a manner that is just and equitable after considering the s. 8 matters. Those include contributions to acquiring, keeping or improving property, the length of the relationship, and each party's income and resources.

The s. 8 list goes further. The Court also looks at contributions to the marriage and family welfare, including homemaking and parenting, and contributions to a business, farm or enterprise. It may consider any oral or written agreement, earlier distributions by gift, agreement or order, tax liability from a transfer or sale, and any other relevant fact or circumstance.

Unless a written agreement meeting s. 38 sets a different date, property is valued as of the date of the trial.

Other property treated the same way

• Property bought during the relationship with income from exempt property.
• Property acquired after a decree nisi, nullity, judicial separation or declaration of irreconcilability, or after partners became former partners.
• Gifts between spouses or partners.

These are also distributed on the just-and-equitable basis rather than being simply exempt. How mixing funds or putting money into a home affects an exemption depends on the facts and the case law, so it is worth confirming with a lawyer.

Time limits and financial disclosure

Deadlines matter. For spouses, an application based on separation must be brought within 2 years after the date the spouses separated, and applications tied to divorce, nullity or judicial separation generally must be brought within 2 years of the decree or declaration. A single reconciliation period of up to 90 days is not counted when calculating that time. Adult interdependent partners have 2 years from the date they knew, or should have known, the relationship had ended.

Once a claim is underway, each party must file a sworn statement disclosing all their property wherever located, including property disposed of within one year before the application, and serve it on the other party. The Court of King's Bench Financial Disclosure Statement also includes a list of property claimed as exempt under section 7. That is where your records of pre-relationship property become useful.

What to do next

• Gather records showing what the property was worth when the relationship began, and when you acquired it.
• Collect current statements, appraisals and mortgage details.
• Note any money or work either of you put into the property.
• Check whether you signed any agreement about property, since a valid one can change these rules.
• Note the date you separated, since time limits may apply.
• Speak with a lawyer about how the Court might share the growth in your situation.

Frequently asked questions