One of the most difficult and confusing issues to deal with in a separation can be how to divide the property that has accumulated during the relationship.  It isn’t always immediately clear what property needs to be divided or how that division is to take place.

 

In a separation or divorce, the property accumulated during the relationship is divided as per the Family Property Act.  This Act sets out that the starting point for dividing the property that has been accumulated during a relationship is division on an equal, 50/50 basis.  This includes all property that was accumulated during the relationship, including the family home and other real estate, bank accounts and investments, business or corporate interests, and pensions.  Debts that were accumulated during the relationship are also divisible.  It does not generally matter in whose name the property was purchased or registered.  In most instances, family property in Alberta is divisible up to the date of the agreement, court order or divorce, and not as per the date of separation.

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In certain circumstances, some property is exempt from the equal division.  Often termed “exempt property” or simply “exemptions”, this includes property owned by one spouse solely prior to the relationship, gifts received by one spouse solely from a third party, inheritances to one spouse solely, an award in damages from a lawsuit by one spouse solely and proceeds from an insurance policy, provided that the proceeds were not property related and were for one spouse only.  However, in certain situations, exempt property can lose its exempt status.  If the property is put into joint names with the other spouse, or if the property is disposed of, this can impact or eliminate the exemption.