What If Your Spouse Hides or Gives Away Property in Alberta?

It is stressful to watch money leave a joint account, or to hear that a vehicle or a cottage has suddenly been put in a parent's or friend's name. Many people in this position worry that by the time the property division starts, there will be nothing left to divide.

The Family Property Act in Alberta has tools aimed at exactly this. They apply to married spouses and to adult interdependent partners. This article walks through the main ones, the deadlines that matter, and what to gather. A lawyer can confirm which tools fit your facts and check the current wording of the sections.

This article covers the law of Alberta.

Sworn disclosure: what the other side must reveal

Each party must file a sworn statement disclosing all their property wherever it is located, including property disposed of within one year before the application, and serve it on the other party. The form is the Family (Matrimonial) Property Statement.

The Court of King's Bench Financial Disclosure Statement also includes a sworn, itemized list of income, assets and liabilities, and a list of property claimed as exempt under section 7. Because both are sworn, a missing account or an unexplained transfer can be questioned.

The look-back matters. A sale or gift made in the last year does not disappear from the picture; it has to be listed.

How hiding or giving away property affects the split

Property acquired during the marriage that is not exempt is generally distributed equally, but that presumption yields where an equal split would not be just and equitable after the Court considers the matters in section 8.

Two of those matters speak directly to this problem: substantial gifts to third parties or transfers to people who were not bona fide purchasers, and dissipation of property to the other person's detriment. A court can weigh these when deciding how to divide what remains.

Acting early: orders you may be able to get

Spouses can normally seek a family property order only in specified situations, such as after divorce or after living separate and apart for at least one year. It can also be made where a spouse is transferring or gifting substantial property to defeat a claim, or is dissipating property.

For adult interdependent partners, an order is available once they are former partners, or while separate and apart if the other is transferring property to defeat the claim or dissipating property.

The Court can also restrain a planned transfer or gift that could defeat a claim, even while the parties still live together, and can do so ex parte, meaning without notice to the other person. Separately, ex parte orders are allowed where there is danger of injury.

• Dissipation means wasting or draining property to the other person's detriment.
• A restraining order is aimed at stopping a transfer before it happens.
• The Court can make any other order it considers necessary, including sale, security or charges against property.

Protecting specific assets

Breaking the household goods rule is an offence with a fine of up to $1,000. The Act uses the term certificate of lis pendens, not caveat.

If the property has already been transferred, the Court can order it returned, give a money judgment against the recipient, or count the property as part of the transferor's share. This applies where the transfer was made to defeat a claim, the recipient was not a bona fide purchaser for value, and the recipient knew or ought to have known the purpose.

Deadlines and what to do next

An application based on separation must generally be brought within 2 years after the spouses separated. For a claim against a transfer made to defeat a claim, the limit is 2 years from separation or 1 year after the transfer, whichever comes first. Action against a recipient is allowed only for transfers made not more than one year before the application.

Adult interdependent partners have 2 years from the date they knew, or should have known, the relationship had ended. A single reconciliation period of up to 90 days is not counted for spouses.

• Write down dates of any transfers, withdrawals or gifts you notice.
• Collect bank, investment, vehicle and land records you can lawfully access.
• Once proceedings have started, do not dispose of, encumber or remove household items from the home unless the other party consents or a court order allows it.
• Note your separation date and any short reconciliation.
• Speak to a family lawyer promptly, because the transfer deadline is the earlier of two dates and may already be closer than you think.

Frequently asked questions