When a common-law relationship in British Columbia comes to an end, the division of property is primarily governed by the Family Law Act. Under this legislation, unmarried couples who have lived together in a marriage-like relationship for at least two years are legally considered “spouses” for the purpose of property division, with a process that closely mirrors that for married couples.

The initial step in this process is to confirm your spousal status. To qualify for property division under the Family Law Act, you must genuinely have lived together in a marriage-like relationship for at least two years. If you don’t meet this specific threshold, the property division provisions of the Act generally won’t apply, meaning each party will typically retain the property registered in their own name. It’s worth noting that even if you have a child together but haven’t cohabited for two years, you might be considered a spouse for support purposes, but not for property division.

Once spousal status is established, the next crucial step is to identify and classify all property. Property is categorized into two main types: Family Property and Excluded Property. Family property includes all assets acquired by either spouse during the relationship, regardless of whose name is on the title. This typically covers real estate purchased during the relationship, bank accounts, RRSPs, pensions, investments, vehicles, and business interests. Importantly, any increase in the value of excluded property during the relationship is also considered family property. Excluded property, on the other hand, generally includes assets owned by one spouse before the relationship began, gifts or inheritances received by one spouse during the relationship, and certain types of damage awards, insurance proceeds, and trust property.

Before resorting to court, spouses are strongly encouraged to attempt to reach an agreement on property division. This can be achieved through direct negotiation, culminating in a formal separation agreement, for which independent legal advice is highly recommended. Alternatively, methods like mediation or collaborative law can help resolve disputes outside of court. If an agreement cannot be reached, either party may apply to the BC Supreme Court for a property division order. It’s crucial to be aware of the limitation period, which is two years from the date of separation for common-law spouses.

Throughout this process, full financial disclosure is a legal requirement for both parties. You are obligated to provide complete and honest information regarding all assets, debts, income, and expenses. Failing to provide full disclosure can lead to severe court penalties or even result in an agreement or order being set aside.

Once an agreement or court order is in place, the next step involves the transfer or division of assets. For assets like real estate or vehicles, legal title must be updated through the appropriate authorities, such as the Land Title and Survey Authority for real property. Legal assistance is highly recommended to ensure all documentation is properly prepared and registered. Additionally, family debts incurred during the relationship are generally considered shared and are divided equally, regardless of whose name the debt is in. However, creditors may still pursue either party for joint debts. To protect yourself, it’s wise to close joint accounts and credit lines, notify creditors of the separation, and consider refinancing or paying off shared debts.

Finally, it’s important to consider the tax implications of property transfers. The transfer of certain assets, particularly investment properties, may trigger capital gains tax. Consulting both a family lawyer and an accountant is prudent to fully address any potential tax liabilities. It’s also worth noting that, as of January 2024, companion animals (pets) are treated as a unique type of property with specific rules applying to their division. While equal division of property and debt is the standard, a court will only order an unequal division if equal division would be “significantly unfair” (Family Law Act, s. 95).

If you are navigating the complexities of property division after a common-law relationship in British Columbia, contact Northam Law today to schedule an appointment. You can reach us by phone at 604-630-2350 or by email at admin@northam-law.com.

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The post Common-Law Relationships and Property Division in B.C. appeared first on Northam Law Corporation.

In British Columbia, many couples choose to live together in committed, marriage-like relationships without formally marrying. These relationships—commonly called “common-law relationships”—are recognized under BC’s Family Law Act. Importantly, once certain criteria are met, common-law couples have nearly identical property and debt division rights as married couples upon separation.

When Are You Considered a Common-Law Spouse in BC?

Under the Family Law Act, a person is considered a “spouse” for property division purposes if:

• They have lived with another person in a marriage-like relationship for at least two continuous years, or
• They have lived together for less than two years but have a child together (note: this only grants spousal status for support, not property division).

Once you meet the two-year cohabitation threshold, you and your partner are treated the same as married spouses for property division, spousal support, and related family law matters.

Do Common-Law Partners Have the Same Property Rights as Married Couples?

Yes. If you qualify as a common-law spouse under BC law, the rules for dividing property and debt are essentially the same as for married spouses:

• Family property is generally divided equally, regardless of whose name is on title or account.
• Family debt is also shared equally.
• Excluded property (such as pre-relationship assets, inheritances, or gifts to one spouse) remains with the original owner, but any increase in value during the relationship is shared equally.

What Counts as Family Property?

“Family property” includes almost all property owned by either spouse at the date of separation, except for excluded property. Examples include:

• The family home (even if only one partner is on title)
• Bank accounts, investments, RRSPs, pensions
• Vehicles, business interests, and other significant assets
• The increase in value of excluded property during the relationship

“Family debt” includes mortgages, credit cards, lines of credit, and other financial obligations incurred during the relationship.

What Is Excluded Property?

Excluded property is not divided on separation. It includes:

• Property owned by a spouse before the relationship began
• Gifts or inheritances received by one spouse during the relationship
• Certain types of damage awards and insurance proceeds

However, any increase in value of excluded property during the relationship is considered family property and is divided equally.

What Happens if We Separate?

If you separate after meeting the common-law threshold, you have two years from the date of separation to make a claim for division of property or debt. Resolution can occur by:

• Negotiating a separation agreement
• Mediation
• Court proceedings if no agreement is reached

Can Property or Debt Be Divided Unequally?

The default is equal division, but the court may order unequal division if equal division would be “significantly unfair” considering factors such as the length of the relationship, agreements between the parties, or contributions to property or debt.

Key Takeaways

• In BC, common-law couples who have lived together in a marriage-like relationship for at least two years have the same property and debt division rights as married couples.
• Family property and debt are generally divided equally, with specific rules for excluded property and its increase in value.
• There is a two-year limitation period to bring a property or debt claim after separation.

Your legal solutions start here. Book your appointment with Northam Law today! Call (604) 630-2350 or email admin@northam-law.com

Related Articles:

Examining How Marriage Breakdowns Influence Property Transfer Tax Exemptions

Legal Steps To Take To Protect Assets and Financial Interests In The Event of a Separation or Divorce

The post Property Rights of Common-Law and Married Couples After Separation in British Columbia appeared first on Northam Law Corporation.