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What happens to property I owned before marriage in Alberta?

By
Getz Collins and Associates
Date
May 12, 2022

What happens to property I owned before marriage in Alberta?

The division of property when a marriage breakdown occurs can be a stressful part of the separation process. Some of your belongings are tied to fond memories or hold sentimental value, but the financial aspect is important too. Who gets what? And what happens to property that one of you owned before your marriage?

How does the division of assets after divorce work in Alberta?

In Alberta, the division of property is determined by the Family Property Act. Formerly known as the Matrimonial Property Act, this law classifies and divides family property and debts after a marriage breakdown. 

If you and your former spouse cannot agree on the division of assets, you have up to 2 years from the date of your separation to file a legal claim. When you do this, you and your former spouse or partner are required to submit statements of all the assets you own (in whole and in part). The Court then determines the value of your property and decides on a fair division of the property. 

A fair division of property typically means that each spouse receives an equal share. However, there are exceptions when the Court deems unequal division as fair because of exceptional circumstances. 

Which property is exempt from division?

The property you and your former spouse must include in your list of assets will cover family property and exempt property. 

Family property is:

  • Owned by one or both spouses or partners 
  • Acquired by one or both spouses or partners during or after the marriage relationship
  • Used to benefit one or both spouses or partners or their children

Examples of family property include the family home, vehicles, investments, business assets, or household goods. 

The following types of assets may be exempt, but will require proof of exemption in Court:

  • Property purchased by one spouse or partner before the marriage
  • Inheritance
  • Insurance proceeds
  • Gifts received from a third party
  • Awards or legal settlements designated for one spouse or partner

If you had a legally binding prenuptial agreement in place, it will supersede the Family Property Act for the division of property.

How is the value of exempt property determined?

The value of exempt property is determined by the market value at the time the property was acquired or when the marriage began. If the value of the property increased during the marriage, the increase in value may be divided between the spouses or partners in a way the Court considers just and fair. 

The Court makes this assessment based on several factors, such as:

  • Each spouse’s contribution to the marriage (or each partner’s contribution to the relationship)
  • The financial situation of each spouse or partner
  • Any agreements the spouses or partners made
  • The duration of the marriage or relationship
  • Existing Court Orders
  • Tax liabilities incurred when transferring or selling the family home

The increase in value of exempt property is often divided equally between the spouses or partners if it’s considered a product of the marriage or relationship. 

What if my spouse is a joint owner of exempt property?

If you want to keep the full value of exempt property, the property must be only in the original owner’s name or traceable to an account in the owner’s name. You will lose part of the exemption value in the following situations:

  • If your spouse or partner is a joint owner of the exempt property
  • If the property is combined with other property so that it loses its traceability
  • If you spend the funds
  • If the property was a gift from a third party to both spouses or partners

How can I protect my assets from division in case of divorce?

The only way to ensure your assets are protected from division in case of divorce is to put a legally-binding prenuptial agreement, cohabitation agreement, or postnuptial agreement in place. Without this, the division of property is decided by the Court. 

The family law attorneys at Getz Collins and Associates can draft and execute agreements and advise you on the best way to protect your property. Contact us today for legal advice about property exemptions and protecting your assets. 


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