On behalf of Gary Kirk of Kirk Montoute LLP posted in Family Law on Monday, January 19, 2015.
If you’re like a lot of couples here in Calgary who are separated or going through the divorce process, you may have a considerable number of questions about what to expect as things continue. One such question is posed in this week’s title: what happens to matrimonial property after a separation?
As we mentioned in an October post, the Matrimonial Property Act, or MPA for short, helps classify property for couples here in Alberta for the purposes of distribution after a separation or divorce. The presumption under the law is that most debts and property acquired during the course of marriage should be divided equally after separation, with a few exceptions of course.
Because we have already discussed property that is exempt from the MPA’s guidelines, this week we wanted to talk about what happens to eligible matrimonial property.
According to the Alberta Courts, to start the process, a couple must first be separated or divorced and must be living in Alberta in order for the MPA to be applied. The MPA only applies to married couples, not to anyone living under a common law marriage or those who are considered unmarried.
The next step is to identify all matrimonial property in your possession or possession of your spouse. Once an MPA action has been started, each party is then required to provide a statutory declaration of income, asset and liabilities, as well as supporting documentation.
After identifying property and providing your spouse with full disclosure about assets and debts, the valuation process can begin. This process can be complex, typically requiring you to determine how much the assets are worth or how an asset will be affected by tax. For assets such as defined benefit pensions, shares, reserved share units, or the capital gain tax liability associated with non-registered investments, the assistance of a tax accountant or actuary may be required. If you or your spouse operate a business, it may be necessary to retain a certified business valuator to determine its value.
Another question to be resolved is whether to value the assets and liabilities at the date of separation or a subsequent date. If the dispute proceeds to trial, the MPA directs that assets be valued at the date of trial – this can result in an unexpected windfall to one party or the other, particularly if assets such as real property or investments have seen a significant increase or decrease due solely to market forces.
Once all of these steps have been taken, you can move onto the final step: actual division of property. During mediation, the parties can engage in some “horse-trading” – swapping assets or debts in a manner that suits them – even trading property off against spousal support if that suits their interests. Also, the final division of property need not be absolutely equal, provided the parties are agreeable to the division. This sort of flexibility is not available at trial.
A Calgary family lawyer can assist you with the process of identifying, valuing and dividing matrimonial property.
Related Posts: Understanding home ownership and property rights in a divorce, Travelling without children during a family law dispute, Set boundaries and rules to protect kids from child custody drama, Protecting credit amidst a family law dispute