Similar to a business, a marriage will accumulate assets as time passes. When a business goes under, its assets are distributed, or sold. The same applies to a marriage during a divorce. The husband and wife divide the marital assets as part of the divorce process. However, some people may not be 100 percent clear on what a marital asset is in Alberta.
There are three types of assets according to Alberta family law. The first is matrimonial property. Matrimonial property consists of all assets and debts accumulated by either or both spouses during the duration of the marriage, including anything acquired after the date of separation. This may include property, vehicles, credit cards and household goods. The value of the matrimonial property is split evenly between the two parties, unless this would be unfair to one party.
The second category is exempt property. These are assets or debts acquired by one party before the marriage, or received as a gift, inheritance or settlement from a third party during the marriage. As the name implies, these items are exempt from division, so long as they are demonstrably the property of one person.
The final category is increase in value of exempt property. For example, if a painting owned by one party before getting married was worth $5,000 at the time of acquisition, but was worth $15,000 at the time of divorce, the original $5,000 would be exempt from division. However, the $10,000 increase in value is not exempt and is subject to equitable division. The judge will determine the actual amount based on several criteria.
Marital property is a large iceberg in the ocean of divorce, and this article only addresses the tip. It is important to understand the process of asset division, including identifying and valuing assets, before heading to court, or the negotiating table, in order to come away with the best settlement. A knowledgeable lawyer can help during this or any part of a divorce in Alberta.
Source: albertacourts.ca, “Matrimonial Property – General Information”, Accessed on March 29, 2017