2020 brought with it significant changes to Alberta’s Matrimonial Property Act. Below, we answer 3 common questions about these changes. The information provided is intended to deliver a high-level summary and as such, it is encouraged to seek legal advice from a qualified practitioner for a full understanding.
1. What has changed?
The Matrimonial Property Act, RSA 2000, C.M-8 is a key piece of legislation that has traditionally governed the way in which property and assets are divided amongst married couples that are divorcing.
As of January 1st, 2020, it has been renamed the Family Property Act. Whereas the predecessor legislation, the Matrimonial Property Act, only applied to married couples, this new Act will now also be applied to the cases of unmarried couples that are determined to have formerly been in a relationship of interdependence, and have separated after January 1st, 2020. Prior to this change, no specific law in Alberta dealt with property division for unmarried couples, and in cases of disputes, judges would often be left to piece together entitlement to property based on common law legal doctrines and applying precedent decisions.
2. Does the new Act apply to me?
A relationship of interdependence is one where (outside of marriage) two people share one another’s lives, are emotionally committed to each other, and function as an economic domestic unit. A number of factors are reviewed in meeting this legal definition, however the 2 most common considerations include cohabitation of 3 years or more, or, having a child together.
It is important to know that the new Act does not discriminate between both same sex and opposite sex partners who are in a romantic relationship, those who are related to each other (if the latter meets the legal definition based on 3 or more years of cohabitation) and in some potential but limited circumstances, unrelated parties who simply cohabit with each other in a relationship of interdependence.
The new Act applies to you if you became a former Adult Interdependent Partner (AIP) after January 1st 2020. You meet this definition if; you have been living apart from your former partner for longer than a year, or you have both signed a written agreement identifying your separation, or, one of you has married a third party.
Note: You can also meet the definition of former AIP, even if your partner wishes not to separate. Ask us how.
3. What does this mean for division of property?
Former AIPs can come to an agreement on the division of property on their own, however that agreement must fall within the formal execution requirements of the new Act (i.e. be in writing, signed by both parties with Certificates attached signed by separate lawyers giving independent legal advice to each party), and be signed without compulsion from either party. In order to meet the enforceability criteria of the Family Property Act, it is necessary to engage a qualified legal practitioner to assist with this process to provide independent legal advice.
In cases where there is contention between partners and further action may be required, the new Family Property Act offers a scheme for the division of property upon the breakdown of both marriages and AIP relationships alike. This scheme will be applied by the courts if a spouse or former AIP applies for a Family Property Order (a new option under the new Act).
Note: The new Act, in conjunction with the Limitations Act of Alberta, allows each partner up to 2 years from the date they know their relationship ended to make a claim for property division.
Although each case is different, this scheme provides a structure that mirrors that of the traditional matrimonial division of assets and debts. This can mean that even if property or debt is in one former AIP’s name, the other partner may be obliged to share in it (if that is considered the just and equitable option). At a high-level, the court will consider property acquired after the relationship of interdependence began in the calculation of assets. This is excluding (with some exception) anything acquired as inheritance, damages in tort, 3rd party gifts, and proceeds of certain insurance policies unrelated to property.
As of the shared residence is often one of the most immediate property-related concerns of separated AIPs, the new Act states that exclusive possession of any property leased or owned by one or both former AIPs or that has been lived in together, can be granted solely (by the court) to one of the former AIPs. This change protects and AIPs right to the family home.
Note: Existing property division agreements that were enforceable under general law when they were signed will still be enforceable, even with the new Act.
Since partners often enter into other formal and informal agreements throughout their time as a couple together, it is important to engage a qualified practitioner to ensure that you do not get caught in a web of complexities during the property division process. Contact our team today for expertise that is relentless, diligent, compassionate and professional.