Monday, 3 December 2012

Thinking About Leaving? Timing and the New Family Law Act

By Michelle Guy, Vancouver Family Law Lawyer at Paine Edmonds LLP

Whether you are currently living in a common law relationship or are married, if you are thinking about ending your relationship, the current state of the law invites you to put your mind to the timing of your exit.

While this post may seem iterative of the earlier post titled Property Now, Property Later, as the induction of the new Family Law Act nears, men or women thinking about leaving their significant other are pressed to take a critical look at how the timing of their exit may affect their property rights down the road.  If you are in the difficult position of deciding to end your marriage, and you share or have assets that either existed prior to your marriage or have been inherited since, leaving now rather than waiting until March of 2013 may have a significant impact on the eventual division of assets.

On March 18, 2013, British Columbia’s new Family Law Act comes into force, and any new litigation commenced at that time will be decided in accordance with its terms. Currently, division of assets is handled by the Family Relations Act and only applies to married couples. There is a presumption of an equal division of family assets under the current law, and the onus lies on the party seeking a greater piece of the pie to demonstrate that it would be unfair for the Court to do otherwise.

Currently, common law couples have no presumptive right to the assets of the other party, and the party seeking any of the assets of the other bears the onus to prove that they have made a contribution that justifies their claim to part of those assets.

Under the new Family Law Act, couples who are either married or common law, will share equally in the growth that accrued in the value of any assets during the marriage, but the initial value that a party brought into the marriage can be taken back out by that party. Further, if you inherited assets while married, you can also take those assets out of the marriage, minus half of any growth in the value.

As the new law is just around the corner and provides for significant changes to how assets are divided, people thinking about leaving would be wise to see a lawyer to discuss their situation and whether a separation prior to the new law coming into place will attract a significantly different result than if you hunker down and wait it out.

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