At first glance, family law regarding the division of family assets seems straightforward. Family assets are all those assets owned by both parties at the time of separation. The family home, automobiles, furniture, boats, snow machines, motorcycles, bank accounts, RRSP’s, investments… the list is broad and inclusive. Pension credits and pensions are family assets. The shares in a family business and business interests are considered family assets.
Under the new Family Law Act, all assets owned by the parties at the time of separation are family assets, except “excluded assets”. Generally, excluded assets are those assets brought into the relationship at the time the relationship commenced or the parties marry, at the value of those assets at that time. Also excluded are proceeds of insurance, lottery winnings, gifts, and inheritances that each party receives, either before or during the marriage.
You and your spouse have a wide discretion as to how you choose to divide family property. If you consider the distribution of property together with spousal support, you’ll both have an opportunity to structure your affairs in the most tax efficient manner possible. Consulting a collaborative family lawyer or a mediator at the earliest stage in the process is recommended.
I like to tell people that they should consider that they have a pool of assets and a stream of income. They have present needs and plans for the future. The exercise should be to distribute property and income in a tax friendly manner that maximizes the ability of both of you to get on with your lives.
At Just Family Solutions, Ron Smith is able to assist both parties in mediating the distribution of family assets at the time of their separation. Ron reminds the parties that they should mediate early, and mediate often to keep these issues far away from the courts in order to provide an efficient and interest-based resolution to their family issues.