Who Keeps What? Property Division on Separation in BC

When a relationship ends, one of the first questions is who keeps the house, the savings and the debts. In British Columbia, the Family Law Act sets a default approach.

This article explains family property, excluded property and debt, and when a different split is possible. Your situation may differ, so treat this as general information.

This article covers the law of British Columbia.

The default: equal division

Spouses are both entitled to family property and responsible for family debt. On separation each spouse has a right to an undivided half interest in all family property as a tenant in common, subject to any agreement or order.

These rules apply to married spouses and to unmarried spouses who have lived in a marriage-like relationship for at least two years.

A person is a spouse if married, or if they have lived with another person in a marriage-like relationship for a continuous period of at least 2 years. Outside the property and pension division parts, an unmarried person who has lived in a marriage-like relationship and has a child with the other person is a spouse even without 2 years together, so the child rule applies to matters such as spousal support but not to property or debt division.

A relationship begins on the earlier of the date the spouses began to live together in a marriage-like relationship or the date of their marriage. Spouses may also be separated even while continuing to live in the same residence.

Excluded property

Excluded property includes property acquired before the relationship began, inheritances, and gifts from a third party. A spouse claiming property is excluded must demonstrate it.

There is an important exception. The increase in value of excluded property during the relationship can still be divided.

Debt and valuation

• Family debt includes all financial obligations incurred by a spouse from the start of the relationship until separation.
• Debts incurred after separation count only if incurred to maintain family property.
• Family property is valued at fair market value, and its value and family debt are determined as of the date of the agreement or the hearing.

The separation date matters, so it helps to know how reconciliation is treated. For property division, spouses are not considered to have separated if, within one year after separation, they begin to live together again with the primary purpose of reconciling and continue to live together for one or more periods totalling at least 90 days. If the reconciliation totals less than 90 days, or the primary purpose was not to reconcile, that rule does not apply and the original separation date stands.

When the split may not be equal

The Supreme Court can order an unequal division of family property or debt if equal division would be significantly unfair. Factors include relationship length, contribution to the other spouse's career, whether debt was incurred in the normal course, and post-separation changes in value.

Spouses can also opt out of the default rules by making an agreement, so a different split by agreement is allowed. A court may set aside part or all of a property agreement if, for example, a spouse failed to disclose significant property or debts.

A separation agreement does not have to be filed or registered with a court to be binding. The rules for setting aside a property agreement apply to a written agreement with each spouse's signature witnessed by at least one other person.

Two protective tools exist while a claim is pending. The Supreme Court can give a spouse exclusive occupation of a family residence for a specified period, and this does not transfer ownership. The court must also restrain a spouse from disposing of property at issue unless that spouse establishes that a claim will not be defeated.

What to do next

• List all property and debts, noting when each was acquired.
• Identify anything you think is excluded and gather proof, since you must demonstrate it.
• Keep records of values and debts at separation.
• Watch the deadline. Property claims must be started within 2 years.
• Property division is heard in the Supreme Court, so get legal advice before you sign an agreement.

For married spouses, the two years run from the divorce order, and for unmarried couples who lived in a marriage-like relationship for at least two years, they run from the separation date. A spouse may also apply to set aside a property agreement within 2 years after first discovering, or reasonably ought to have discovered, the grounds. How these deadlines apply depends on your situation, so it is worth confirming with a lawyer.

Frequently asked questions