Property Division in Surrey

There are several presumptions in the Family Law Act aimed at making things clear on how property is to be divided.

The most important is that family property is presumed to be shared equally between the spouses, regardless of their use of or contribution to that property. This means that each spouse ostensibly owns 1/2 of any given asset, whether or not they were the person who paid for it, ever used it, or even wanted it in the first place. Despite this, a court always has the discretion to divide family property unequally in certain circumstances.

Another presumption is that excluded property – meaning property that is not family property – is presumed to remain the property of the spouse who brought it into the relationship or received it. (However, any increase in value of excluded property during the relationship becomes family property and is shared). Determining what is and what isn’t excluded property is not always straightforward and has been the subject of numerous cases decided by the court. As with the other presumptions, it is always subject to the discretion of the court, and Family Law Act allows a court to divide excluded property in certain circumstances.

Dividing a business or professional practice, whether small self employment business or a large corporation with complex corporate and share structure, can be a difficult and complex process. The lawyers at Cote & Evans Trial Lawyers are experienced in handling a wide array of issues that may arise when dealing with businesses and professional practices and can advise how the courts would determine the division of these types of assets given various different circumstances.

Spousal Support and Property Division are two separate family law issues. A person seeking spousal support from their spouse must first establish entitlement to spousal support. A person can be entitled to both spousal support as well as their interest in the family property. The lawyers at Cote & Evans Trial Lawyers are experienced in dealing with claims for spousal support and property division and can assist you in ensuring your rights and interests are protected.

In BC, prenuptial agreements are more commonly called Marriage Agreements or Cohabitation Agreements. These types of agreements can assist individuals in protecting assets they own prior to the relationship and can also assists in clearly setting out terms of how property is to be divided in the parties were to separate.

FOREIGN ASSETS

Generally speaking, the BC courts can make orders over property in other jurisdictions.  This means property located in other provinces and other countries.  Whether it is beneficial to do so depends on a number of legal and practical considerations, including:

1. how the property would likely be divided in that jurisdiction,
2. whether an order that the BC courts make would be enforced in that jurisdiction,
3. the cost of having proceedings in more than one jurisdiction, and
4. other case specific considerations.

It is important to get timely legal advice if you or your spouse have assets in a foreign jurisdiction.  Determinations about jurisdiction often occur early in the case, and can have potentially enormous consequences down the road.

This is especially true if you suspect that your spouse may be transferring assets to a foreign jurisdiction, such as India or China, where it may be difficult to enforce any order that the BC courts may make.  The lawyers at Cote & Evans Trial Lawyers have experience in quickly obtaining financial restraining orders (freezing orders) to prevent one spouse from moving money overseas.  This can sometimes mean the difference between a fair division of assets and financial devastation.

RRSPS

Like other financial assets, Registered Retirement Savings Plans (RRSPs) are generally considered family property if they were acquired during the course of the marriage.  If some or all of the RRSP was acquired prior to the marriage, then it may be excluded property that is not subject to division.

RRSPs are often divided as of the date that an agreement is signed or when a trial occurs.  That means it could be several months or even years after separation before a RRSP is actually divided.  For this reason, it is important to get legal advice regarding contributions or withdrawals from RRSPs after separation.

Likewise, there are important income tax considerations when dealing with RRSPs.  The Income Tax Act has special provisions to allow spouses to transfer RRSPs without tax penalties in the case of a separation.  The team at Cote & Evans Trial Lawyers has extensive experience assisting clients in dividing RRSPs and ensuring that tax consequences are minimized.

INVESTMENTS

Stocks, bonds, GICs, futures and other financial investments are also considered family property.  It is important to have them accurately valued with professional assistance because the book value may not represent the true value of the asset.  As well, there are tax considerations to account for when dividing shares, which may be subject to capital gains taxes or fees in certain situations.

For risky investments that lose money, courts often apportion that loss between spouses even though one spouse may have made the decision to invest.  Courts recognize that even after separation, couples must share in the ups or downs of market forces until assets are divided.  If you are concerned about risky investments that your spouse may have made, you should seek legal advice to help you explore your options and what you can do to protect assets that may be at risk.

TAX CONSIDERATIONS

A separation inevitably involves the disposition or transfer of assets that would normally trigger tax liabilities.  Fortunately, the Income Tax Act contains several provisions to protect spouses from having to pay taxes when transferring an asset to other spouse as part of an agreement or court order.  It is essential, however, that any agreement or order is drafted so that it ensures that those provisions are invoked and that taxes can be avoided.  Or, if taxes can’t be avoided, they should be shared fairly between the spouses.

When a court is dividing assets, it does have discretion to consider any tax consequences that might arise in deciding whether property should be divided evenly or not.  When one spouse can point to a tax liability that will be incurred on the disposition or transfer of an asset, the court can order that the division account for that tax liability.  For instance, if a spouse had $100,000 of stocks to divide, normally they would be required to pay their spouse $50,000.  However, if those stocks had a capital gains tax of $20,000 if they were sold, a court would likely adjust the division of the stocks so that the spouse keeping the stocks did not actually have to pay $50,000, since that is not what the other spouse would get if the stocks were sold and evenly divided.  This same logic applies to the drafting of agreements, which is why it is important to get legal advice regarding any tax implications before assets are divided.

At Cote & Evans Trial Lawyers, we’ve seen many situations where parties have signed an agreement without considering the tax consequences or getting legal advice before signing.  While the couples thought it would save them money not to get lawyers involved in their separation, it ended up costing them much more in time and money to resolve the disputes that arose with the CRA and each other.

The lawyers at Cote & Evans Trial Lawyers can assist you in navigating the complex and sometimes acrimonious disputes that arise between spouses in relation to division of family property and debt. The lawyers at Cote & Evans Trial Lawyers are experienced in dealing with various different disputes pertaining to division of family assets including dealing with division of business interests including complex corporate structures, family trusts, real property and other financial assets. Often an experienced lawyer can ensure that you are receiving what you are entitled to by ensuring that your interest in the property is protected. This includes assisting in identifying all family property, ensuring proper valuation is given to the assets as well as devising strategies to best achieve your goals.