How Are Property and Assets Divided in a Divorce in Canada?
Divorce has been identified as one of life’s most stressful events, and part of that stress is deciding how to divide family property and assets. The longer a couple is married, the more they may have to divide when finalizing the end of the marriage. This can be contentious, but it doesn’t necessarily have to be. Taking a collaborative approach to asset division or using the services of a mediator can help keep the process running smoothly with fewer hard feelings at the end.
But it’s crucial to understand how family property and assets are viewed in Canadian divorce. The following information applies to couples who are legally married as well as those who have lived together for at least two years (known as a common-law spousal relationship).
In Saskatchewan, the law notes that the net value of all assets and debts acquired during the marriage should be divided on a 50/50 basis when the couple divorces, subject to fair and equitable considerations. That means that the assets should be shared as equally as possible by the couple.
Are There Exceptions to the 50/50 division?
There are some exceptions. If one spouse had an asset before the marriage (for example, a rental property), they may retain ownership. However, if it increased in value during the marriage, the amount of the increase may be subject to a 50/50 division.
However, if the property was a house that was used as a residence by the couple during the marriage or if one spouse added the other spouse’s name to the home ownership paperwork, the house could be considered entirely family property that needs to be divided equally.
That said, obviously, a house can’t be cut in half with each part given to each spouse. It may be that one spouse will take the house but surrender some other assets to make up for having the total value of the home.
One exception is if one spouse dissipating family property. For example, if they spent a considerable sum of family money on having an affair the other spouse could request to have the money dissipated taken out of their share of the divided property.
Another potential exception is a pension and the amount earned in the pension prior to the beginning of the spousal relationship. Pensions are complex situations in divorce proceedings, and there may be situations where a pension isn’t divided equally at its source by way of a spousal rollover. Tax consequences should be taken into consideration. If a pension is part of your portfolio, it’s highly advisable to work with an experienced divorce lawyer.
How Are Certain Types of Assets Evaluated?
While things like bank accounts are reasonably easy to set a value on since they’re kept in terms of money, other items such as real estate, art, jewelry, or antiques are more challenging to put a price tag on. In those cases, experts in those fields may be brought onto the file to establish a financial value to be used when dividing the assets.
Do We Have to Go to Court to Have Our Property and Assets Divided in Divorce?
Here’s the good news: Not necessarily. If the couple can come to a mutual agreement about the division of property and assets on their own, they can proceed with that division without further proceedings. As long as the proposed division is fair and equitable, a mutual agreement would satisfy the court even if the division isn’t strictly 50/50.
However, if the couple can’t agree and the case goes to court, the court will likely look for an equal division whenever possible, subject to exemptions and exceptions and other factors that may justify an unequal division.
What if We Can’t Agree on How to Divide Our Property and Assets?
This is not an uncommon situation when couples start talking about divorce. But just because a couple may not agree initially doesn’t mean that court is the only solution.
Working with a collaborative, holistic legal team that could include mediation if necessary might help the couple get back on track without forcing the issue into court.
Our lawyers believe in a holistic approach focusing on cooperation and compromise rather than contention and animosity. To that end, mediators are available for couples that have become stuck. A mediator is an impartial third-party person who isn’t taking either side but has been trained to work with each spouse, ensure both are heard and understood and use techniques that can gently help each spouse brainstorm ideas that can break down a stalemate and lead to a healthier solution.
What if Our Debts Are Greater Than Our Property and Assets?
Some divorcing people divide debts equally between themselves, making each responsible for half. There may be some exceptions to that (examples might include debt accrued before marriage or one spouse accruing debt without the knowledge of the other), and then the debt would stay with one spouse. It may also be difficult to resolve the issue of ongoing debt servicing if the debt in only in one person’s name. Again, this is a topic that can be negotiated in mediation instead of the couple taking it to court.
What Is the Next Step I Should Take Toward Getting a Divorce?
Call Panko Collaborative Law at 306-975-7151 for a consultation. We understand how stressful divorce can be and try to help our clients approach the process collaboratively rather than antagonistically. We can walk you through the specifics of your case to identify which property and assets need to be divided and what that division might look like.