There are four basic ways you may not have to share your property if you split up with your spouse or common-law spouse.

  1. Excluded Property: The Family Law Act, which came into force in March 2013 adopted an “excluded property” model. Separating spouses end up with a “communal pot” of family property to divide, but excluded property is removed from the pot. Excluded property includes property acquired by a spouse before the relationship began, property inherited by a spouse, and gifts received by a spouse from a third party. The definition of excluded property also reaches “property derived from” excluded property or from the disposition of excluded property. Excluded property must not be divided (unless it would be significantly unfair not to divide it having regard to only two factors — the duration of the parties’ relationship and any direct contribution by a spouse to the preservation or maintenance of the property).
  2. Reapportionment: Section 95 of the FLA provides that the court can divide family property unequally if it would be significantly unfair to divide it equally. In making this decision, the court may consider the duration of the relationship; whether there was an agreement between the spouses about the property; one spouse’s contribution to the career of the other spouse; whether family debt was incurred; the ability of each spouse to pay a share of the family debt; whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property;  any tax liability that may be incurred by a spouse as a result of a transfer or sale of property; and any other factor causing significant unfairness.
  3. Prenups and Cohabitation Agreements: An agreement can operate to protect you from sharing your assets with your spouse should you break up. A good legal agreement can also prevent the stress, expense and uncertainty of dividing assets should the relationship end and parties don’t agree. Agreements are intended to be binding on the parties who sign them. However, the court can set an agreement aside or vary it in certain circumstances.
  4. Estate Planning: This is a process which utilizes a wide variety of devices and vehicles such that a person can exercise as much control as possible over what will happen to his or her legacy when that person dies.  The devices and vehicles can include wills, trusts, beneficiary designations, property ownership and co-ownership, gifts, tax-saving or tax-deferring facilities, and powers of attorney. These issues can impact a claim you make, a claim made against you, and/or a claim made against your inheritance or future legacy.