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Property Division

SBL - Property Issues

The division of property of married parties in Alberta is done in accordance with The Matrimonial Property Act. All property owned by both spouses and by each of them individually is subject to distribution, subject to the exemptions set out in the Act.

Under the Act, the market value of property at the time of marriage or the date on which the property was acquired by the spouse, whichever is later, is exempted from distribution if the property is: acquired by a spouse by gift from a third party, by inheritance or before marriage; an award or settlement for damages in tort in favour of a spouse, unless the award or settlement is compensation for a loss to both spouses; or the proceeds of an insurance policy, that is not in respect to property, unless the proceeds are compensation for a loss to both spouses.

The Act provides that the court shall distribute the following property in a manner it considers just and equitable: the difference between exempted value of property and the market value at the time of trial of the property or property acquired in exchange for the original property or from the proceeds of the original property; property acquired with income received during the marriage from the original property or property acquired in exchange for or with the proceeds of the original property; property acquired after a decree nisi of divorce, a declaration of nullity of marriage or a judgment of judicial separation; or property acquired by gift from the other spouse.

The value of property owned by either spouse at the time of marriage is exempt and not included in determining the value of matrimonial property. Any increase in value of that property since the marriage is, however, to be considered by the court. Gifts from third parties or inheritances are treated in the same fashion, and the time for determining exempt value is the time of acquisition. An award or settlement for damages in tort and proceeds from an insurance policy other than property insurance, where these are in favour of one spouse, are also exempt. An exemption does not apply to a return on investment, only to the original exemption; the fruit of investment of exempt property during a marriage is not exempt.

If property is not exempt or distributable as above, it is to be divided equally, unless factors for unequal distribution listed in the Act apply.

In addition to the provincial statutes governing the division of family property on breakdown of marriage, equitable trust principles continue to apply in family law cases. Unmarried spouses typically allege a trust to obtain an interest in property standing in the name of his or her partner to which he or she may have no rights under provincial property legislation.

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