Couples usually come to own assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and incur debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. during the relationship. If the relationship ends, you must divide these assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans., referred to collectively as property or family property.
Different categories of property are dealt with in different ways. Some property is divided equally, while other property is divided unequally or not at all. How you divide your property also depends on the legal status of your relationship.
On this page, “partner” refers to an adult interdependent partner and “unmarried couple” refers to a couple who was not married and not adult interdependent partners.
Need to know
- Dividing property means dealing with all assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans..
- Separating couples must divide all property according to the law and what is fair.
- Some property is divided equally, while other property is divided unequally or not at all.
- The rules for dividing property are the same for spouses and adult interdependent partners but are different for unmarried couples.
- You must divide all assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. acquired before, during and after the relationship.
What assets and debts need to be divided
All separating couples must divide property acquired before, during and after the relationship. This includes spouses, partners and unmarried couples.
Couples may acquire assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. together during the relationship. For example, the couple may buy a couch or home together or get a joint credit card.
One person may bring property into the relationship. For example, one person may have savings or a vehicle they acquired before the relationship started.
One person may also acquire property after the separation. For example, one person may buy another house to live in after moving out of the family home. When dividing your property, include property acquired after the separation and up until you have a written agreement or court order about your property. You and the other person can also agree to exclude property acquired before or after a certain date.
Assets include:
- real estate, such as the family home, vacation properties, farmland and investment properties
- money in bank accounts
- investments, including GICs, TFSAs, RRSPs, RRIFs, stocks and bonds
- insurance policies, including life and disability
- pensions, including Canada Pension Plan (CPP)
- tax refunds
- business interests
- trusts where you are a beneficiarybeneficiary A person who receives income or property from a trust. An example of a trust is a deceased person’s estate.
- valuable personal propertypersonal property Any property a person owns that is not real estate. Examples include vehicles, furniture, bank accounts and clothes., such as jewelry and collectibles
- pets or animals
- tools, furniture, appliances, vehicles, trailers, boats
- inheritances
Debts include:
- money still owing on mortgages
- lines of credit
- car loans
- other loans, such as personal loans or student loans
- overdrafts
- credit cards
When to divide assets and debts
Separating couples should start thinking about dividing their assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. soon after the separation. It is a good idea to start this process when you have a clear mind so that you don’t make rash decisions or give up property you are entitled to.
The benefits of separating assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. in a timely manner include:
- allowing each person to move on knowing what property is theirs
- reducing the risk that one person will improperly use or get rid of assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. or rack up debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans.
- reducing the risk of missing the deadline for going to court if you cannot agree on how to divide your assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans.
Sometimes dividing assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. can turn into a messy and drawn out process. It is not easy to split your lives after a separation. Besides taking time and effort, it can be a very emotional time. If you and the other person can work together, you are likely to resolve the issues quicker. Going to court is an option but should be a last resort.
In some situations, you may need to ask the court to make an order dividing your assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans.. For example, if you cannot come to an agreement or if one person is improperly getting rid of family property.
There are deadlines for going to court. If you miss the deadlines, you may not be able to start a claim to divide property and get help from the court.
- Partners and unmarried couples have two years from their separation date to apply to court to divide assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans..
- Spouses have two years from the date the court grants their divorce to apply to court to divide assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans.. You can also apply anytime before then, including while you’re still married.
What laws to follow
Both Alberta’s Family Property Act and general property principles set out rules for dividing property when a relationship ends. The legal status of your relationship determines which law you must use.
The law changed on January 1, 2020. The information on this page applies to couples who separated on or after that date. If you separated before then, get legal support to better understand what laws and processes apply to you.
Family Property Act
Alberta’s Family Property Act applies to spouses and adult interdependent partners who separated on or after January 1, 2020.
Keep reading to learn about the different categories of property under the Family Property Act.
General property principles
General property principles apply to:
- unmarried couples who separate
- property that spouses or adult interdependent partners acquired before they moved in together or got married, whichever happened first
General property principles, including the law of unjust enrichmentunjust enrichment A claim under property law principles that a person makes to protect property rightfully owed to them. To prove unjust enrichment, you must prove: 1. One person received an enrichment (benefit). 2. You suffered a loss or spent money on the property. 3. There is no legal reason for the enrichment (for example, it wasn’t a gift)., do not assume property should be divided equally. Instead, the general rule is that property acquired during the relationship belongs to the person who paid for it or is its registered owner.
If you are an unmarried couple
Unmarried couples can choose to follow the Family Property Act when making an agreement about dividing their property. If the court must divide property for unmarried couples, it will consider any agreement the couple makes. If the unmarried couple does not have an agreement, the court will follow general property law principles, including the law of unjust enrichmentunjust enrichment A claim under property law principles that a person makes to protect property rightfully owed to them. To prove unjust enrichment, you must prove: 1. One person received an enrichment (benefit). 2. You suffered a loss or spent money on the property. 3. There is no legal reason for the enrichment (for example, it wasn’t a gift)., not the Family Property Act.
Categories of property under the Family Property Act
The Family Property Act separates property into three categories, which are each treated differently. These rules apply only to spouses and partners, not to unmarried couples.
Exempt property is property that is not divided after a separation. One spouse/partner keeps it without the other spouse/partner getting something of equal value in return.
Examples of property that may be exempt include:
- inheritances or gifts one spouse/partner received from someone else
- pensions, investments, RRSPs and other assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. earned before the spouses/partners started living together
- property one spouse/partner owned before the spouses/partners started living together
- an award or settlement of tort damages or proceedsproceeds The money left from the sale of an asset after all the debts related to it are paid. For example, the proceeds from the sale of a house are the money left over after paying the mortgage owing, the realtor and the lawyer. from non-property insurance policies, such as payouts for personal injury cases
If the value of the exempt property has increased over the relationship, that increase may be exempt or divided equally or unequally, depending on the situation.
To claim exempt property, you must still have the exempt property or be able to trace its value to current property. If you mixed the property with other property, known as comingling, you will lose some or all of the exemption. If you are not sure if some of your property is exempt property, get help from a legal professional.
Learn more on the What happens to an inheritance, gift and other exempt property page.
Example
Person A owned a classic car before getting into a relationship. They still have that classic car. When Person A separates from their partner, they will keep the car.
Person B received a $10,000 inheritance when their grandmother died. Person B put the money into a savings account in their name only. Person B will keep the $10,000 from the inheritance.
Person C received a $10,000 inheritance. Person C and their spouse used the inheritance to go on a vacation and pay bills. Person C cannot trace the original $10,000 into existing property so they lose their exemption.
This is property that is divided unequally based on what is fair in the circumstances. One person may keep a lot more of the property while the other person keeps a lot less.
Examples of property that may be divided unequally include:
- any increase in value of exempt property
- property purchased using income received from exempt property
- property acquired after separation
- a gift from one spouse/partner to the other
When deciding whether dividing property unequally may be fair and reasonable, think about:
- each spouse/partner’s roles and contributions during the relationship
- each spouse/partner’s income, ability to earn an income, liabilities, obligations and other financial resources
- the length of the relationship
- any agreements between the spouses/partners
- existing court orders
- whether one spouse/partner has squandered the property
Example
Person A inherited $100,000 cash from their parents a few years ago. They put the money into a separate investment account in their name only. They did not add to or withdraw from this investment account. The investment earned interest and is now worth $120,000.
The original $100,000 investment is exempt property for Person A because the money is in a separate account and did not mix with other family property.
Person A and their spouse can share the $20,000 increase in whatever way is fair. Because the increase is from interest only, it may be fair for Person A to keep most or all of the increase.
The spouses/partners equally share this property unless it would be unfair to do so. This is usually property acquired during the relationship and that is not fully or partly exempt property. If the spouses lived together before getting married, this includes assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. they acquired while living together before marriage.
Examples of property that may be divided equally include:
- the family home
- vehicles
- pensions, investments, RRSPs and other assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. earned during the relationship
- debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans., such as mortgages and credit cards
Example
Person A and their spouse bought a house together before getting married but while living together. They have a mortgage on the house. They also bought a vehicle together and invested money in a GIC.
The house, vehicle, investment and mortgage are family property since Person A and their spouse acquired this property while either living together or married.
Take action
How to divide assets and debts
How to divide up your assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans. after a separation.
Share financial information to divide assets and debts
How to share information about your assetsassets Something a person owns that has value. Assets include houses, vehicles, furniture, money and investments. and debtsdebts Money you owe to others, including individuals and companies. Debts include mortgages, credit cards and loans..
What happens to your home
Figure out what to do with the family home after a separation.
What happens to an inheritance, gift and other exempt property
Figure out who gets exempt property after a separation.
When you can’t agree how to divide your assets and debts
File a court claim to divide property after a separation.