Let Us Help You Get Ready For The New BC Family Law

British Columbians are fortunate to have a new Family Law Act which will take effect on March 18, 2013.  The Family Law Act will replace the present Family Relations Act which has been in effect since the late 1970s.  Among the most significant changes is the new Family Law Act:

Strongly encourages spouses who separate to use alternative dispute resolution such as mediation or collaborative law process instead of the court processes.  Why move family law cases out of the court system and into mediation or collaborative law?  Because the research shows that spouses who separate and use the mediation or collaborative law are more satisfied with their separation agreements and learn effective co-parent skills.  The court system with its adversarial approach has proven to be harmful to the spouses and their children by increasing their emotional pain and financial costs and dissipating their assets. 

Property claims, including pension division claims, will be extended to common-law spouses who have lived together for two years in a marriage like relationship who apply within strict guidelines. 

One of the major qualities of the FLA is the elimination of the term “family asset” with the introduction of excluded property.  Essentially, this means that all real and personal property is considered fair game for division and apportionment unless a spouse can demonstrate that the property is “excluded property.”  The test has changed in that the spouse, who wants the property excluded, now has the obligation to prove the property should be excluded.

Certain types of property are excluded under the Family Law Act unless there is a written agreement to the contrary.  The property excluded is pre-relationship property, gifts, inheritances and settlement/damage awards.  Excluded property includes property head in trust for the benefit of a spouse, unless the spouse has an immediate and absolute interest in the trust property or has the power to terminate the trust.  However, a spouse can claim an interest in the appreciate value of an asset that accumulated during the relationship such as the interest from an investment or the increased value of real property. 

The exclusions are not absolute because the court will have the discretion to divide exclude property if certain factors are proven.  The Family Law Act like the Family Relations Act provides for equal division and unequal division of the spouse’s property.  Section 95 of the Family Law Act sets out factors similar to those taken into account when doing a section 65 analysis under the Family Relations Act.  Those sections provide for judicial reapportionment of property between the spouses where the division would be unfair having regard to the circumstances.

The exclusion of property brought into the relationship means that shares in private company should be valued at the beginning of the marriage or cohabitation and then valued again at the end of the relationship.  The division of the private company will then be based on the increased value of the asset between these two valuation dates.  If funds from an excluded property flow into a non-excluded asset, then there will need to be detailed records maintained in order to properly implement the provision of the FLA when the spouse’s relationship ends.

Marla Gilsig, Family Lawyer Vancouver, and Divorce Lawyer Vancouver, works exclusively on family related matters.  For further information, or to schedule an appointment, call 604.669.6402 or email info@gilsig.ca today.

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