Property Division

Matrimonial Property Legislation

Property and Debt Division Proposals

Property Division is governed at a provincial level. The federal divorce act does not have provisions for property or debt at the time of a marriage breakdown. Each province sets out the laws for the division of property and liability in their respective acts. Some, but not all regions, have common law legislation. While each province's legislation is similar, there is a significant difference.

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What is property division and how does it work?

At the time of a marriage or common-law breakdown, decisions need to be made about property and children. Unfortunately, there is are no concrete rules on how property is to be divided, which can result in lengthy conflict if not managed properly.

Most provinces start with the premise of 50/50 for matrimonial assets, but it is more complicated than that. A range of complexities from pre-marriage assets, inheritances, ownership of property, pensions, and businesses make it more difficult to divide. For example, in some provinces, the matrimonial home may be partially exempt, and in others, it is not. It is for this reason that getting professional advice is essential. Also, this is why there is an increase in the number of cohabitation and prenuptial agreements entered.

I have assets from before my marriage, is that property protected?

Each of the provincial family and property acts, differ slightly with how pre-marriage assets (businesses, home, investment, etc.) are handled. There is also provision for inheritances as well. The bottom line is that this area is complex and getting proper direction and advice makes sense. If you are concerned and not yet divorced or married, having a prenuptial or mid-nuptial agreement set out the terms is a good idea. If you are now getting a divorce without a pre-marriage agreement, then the recent court cases and the laws will lay the foundation of how this property will be divided. Regardless, there is always a way to resolve these issues without fighting.

Do I need a lawyer?

You do not need a lawyer to get divorced. However, you should understand the pros and cons; when hiring a lawyer is the right thing to do and the risks of doing it on your own.

It is essential that you understand the matrimonial laws in your province. A lawyer can provide you with legal education and advice on how the laws may apply to your case. Following the laws and getting legal advice is not the same as hiring a lawyer to fight on your behalf. With a solid understanding of the requirements in your province and recent court cases rulings, you can be positioned to negotiate your division without using lawyers to fight. Therefore, alternative dispute resolution for divorce is becoming the go-to method for getting it done and making decisions.

If there is family violence or a contested divorce, then, unfortunately, you may have to hire a lawyer and have them do what they are trained to do – fight on your behalf.

Having a lawyer draft the separation agreement to ensure that is has the proper legal terminology to protect you, and to receive independent legal advice before you sign a contract is smart.

If I go to a lawyer, what should I ask?

Using lawyers to educate and paper the deal is where they can bring the most value. Ask about recent case rulings in the courts that would be like yours. Information like this can confirm the basis of your approach to property division. Education is key to an outcome that is in your best interest and based on the law.

If you are telling the lawyer your side of the story – remember to tell them your spouse’s side of the story, even if you do not believe it. Ask your lawyer to tell you what advice they would give them if they were their client. This insight will very quickly let you know what you are up against if you chose to hire lawyers and fight it out.

Lawyers are trained to win to create a win-lose

Lawyers want to win. Winning is how they measure their success. Well, this may be prudent in business or criminal cases, having a win-lose in family law can be catastrophic to relationships, careers, co-parenting and property. The price can be too high, and the results do not often justify the means.

Does mediation work for property division?

Mediation or alternative dispute resolution is the best way to resolve an issue - period. You will avoid expensive legal bills and destruction to relationships and assets. Plus, you will not waste your time fighting over and over on trivial issues.

The best approach to dividing property and assets during separation is to have a talented team that is aware of the legal landscape and understands your needs and current financial situation. This team can include, mediators, lawyers, accountants, and financial experts. Depending on the complexity of your situation the group can be small or large. Either way, dividing property without using financial expertise is not a good idea. Hiring a mediator with a strong financial background to navigate your property division, will likely achieve better results.

What about using Arbitration (MedArb) for Property Division?

Arbitration is becoming more common as the backlog in the court system is getting larger. Arbitration is an alternative dispute resolution methodology whereby the parties agree to hire an arbitrator who will hear their case and render a legally binding decision. In matrimonial law cases, many couples are choosing mediation-arbitration (MedArb) as their lawyers encourage them to do so.

With the MedArb, the couple hires a mediator and signs a contract that says that if they cannot come to a decision with the mediator, then the mediator can put on the arbitrator hat, and make a binding decision.

The problem with this approach is that the entire purpose of mediation is so the parties can be heard and share their opinions openly, with the help of the mediator, to achieve a win-win outcome. The couple has the protection of an open and honest process. By adding the arbitration clause, the parties always know that if they cannot agree on their own, that the mediator can become an arbitrator and make a binding decision. The typical outcome of this contract is that most MedArbs end up with Arbitration because the parties are not comfortable being open and honest in the process. They know that what they say can and will be used against them. The arbitrator should not use the conversations that were had during the mediation, to render a decision; however, they cannot control their unconscious bias.

How can we deal with our property division pragmatically?

Financial disputes are usually the primary cause of long drawn out litigation and court battles. In divorce cases where financial assets and property needs to be divided, using someone who specializes in Independently Negotiated Resolution™ (INR) will yield better results. The step-by-step process empowers smart decisions with regards to the value of all the assets and division. The job is not only to help you divide the pie but also to preserve your wealth, protect your assets and provide long-term security.

Fairway specializes in navigating simple to complex property division

We want your decision on property division to stand the test of time. Given the complexity of many clients’ financial situations (business, trust accounts, options, SARS, RSU’s, shareholder agreements, real estate, family business, etc.) you cannot afford to spend time feuding when your time can be better spent analyzing and making sound decisions.

Our resolution experts have a strong financial background to ensure your assets are divided fairly and smartly. We use a mediation methodology that is directive and provides that both parties understand the law and the best way to distribute property, assets, and debts.

The Fairway INR process is designed to:

  • Protect your assets, so they are split in two and not in three ways
  • Ensure you understand the entire financial picture
  • Agree on values before you decide who gets what
  • Use experts to determine values so avoiding needless fighting
  • Avoid long drawn out expensive disclosures
  • Involve accountants and tax experts for sound decision making
  • Consider both short- and long-term implications of financial division
  • Empower those who are less comfortable with numbers and financial decisions
  • Base all decisions on the law and relevant court decisions
  • Have you not have done better if you hired a lawyer to fight

Having a dedicated team of professionals is the best approach to ensure that all of the laws related to property division have been addressed with your interests in mind.