In many ways the division of family property and debt following a separation can be both simple and complex. It can be a simple process as the division of family property and debt is governed by our Family Law Act and the framework of the legislation is based on the concept that assets and debt accumulated during a marriage or relationship is prima facie divided equally upon separation or divorce. However, some assets that are accumulated during the relationship such as through an inheritance or gift are considered ‘excluded property’ that is not subject to a division with a spouse. Likewise, assets brought into a marriage or relationship by one spouse are also excluded property and only the increase in value of the asset during the relationship is divided with a spouse.
However, in many cases the division of property and debt can become a very complex exercise. There are many reasons for this which may include difficulty in determining the value of an asset when it was brought into the relationship and whether a gift that was used to acquire property was a gift to only one spouse or both spouses. Those are just two examples and there are many other examples of complex issues that arise when parties with faced with the task of dividing family property either by agreement or through the courts.
Another possible complexity is the discretion given to our courts to order an unequal division of family property and/or debt if an equal division would be ‘significantly unfair’ (Section 95 of the Family Law Act). The courts may consider a number of factors in determining whether an equal division would be significantly unfair. These include the following:
(a) the duration of the relationship;
(b) the terms of any agreement between the spouses;
(c) a spouse’s contribution to the career of the other spouse;
(d) whether family debt was incurred in the normal course of the spouses’ relationship;
(e) if the amount of family debt exceeds the value of family property and the ability of each spouse to pay a share of the family debt;
(f) whether a spouse after separation caused a significant decrease or increase in the value of family property or debt;
(g) the fact that a spouse may have disposed of family property; and
(h) any other factor that may lead to significant unfairness.