Divorce causes a lot of fear. There are many people who are worried that their ex is going to “take everything.”
Fortunately, under Alberta law, it’s almost impossible for either spouse to “take everything” in a divorce.
Alberta is devoted to the just and equitable distribution of assets. By the same token, intelligent negotiation is very important because certain decisions and maintenance payment set-ups can leave a divorceé in dire financial straits. It’s also important not to panic, because panic may cause you to make moves that turn judges against you.
How Are Assets Divided in an Alberta Divorce?
Assets are divided in a way that is “just and equitable.” This doesn’t mean the assets will be divided 50/50 as that’s not always possible. In addition, 50/50 distribution could be anything but equitable depending on the circumstances of the marriage.
Instead, the court looks at several factors to determine who should get what.
The first is what both spouses contributed to the marriages. Keep in mind this doesn’t just mean “monetary contribution.” Unpaid labor such as housework and child care are contributions and are considered as such.
The length of the marriage also matters. A spouse that has been with you for less than 5 years may walk away with less of the property than a spouse that’s been with you for two decades, especially if one spouse worked or came into the marriage with a lot of property and the other did not.
The next thing the court considers is the financial situation of both spouses. If you’ve been married 20 years the courts don’t want to see one spouse’s standard of living plummet while the other spouse’s remains untouched. The courts also look at the tax liabilities that could be incurred as certain property is transferred.
Finally the court looks to see whether there are existing court orders and considers how those court orders could impact the just and equitable distribution of property.
With all of these issues under consideration the eventual division of property could look closer to 60/40 or 70/30.
Obviously there is a lot of room for negotiation here, and the outcome is usually better for both spouses if they can work something out on their own rather than waiting for the courts to do it for them.
Which Property is Exempt From Division in an Alberta Divorce?
Property which can be designated as non-matrimonial property goes back to the spouse who owned it in the first place, so long as the property has not been commingled with matrimonial assets.
This can include businesses, homes, cars, or recreational vehicles which you owned prior to getting married, inherited assets, proceeds from personal injury lawsuits, property received as a gift from a third party, and insurance proceeds.
Identifying exempt property isn’t always as straightforward as it seems. If you get an inheritance and place it into a marital investment account, then the base amount of that inheritance is exempt property but the interest earnings of that investment may still be divided as matrimonial property. If you used that inheritance to renovate the house the house remains matrimonial property, even if you spent your exempt property to improve the house.
One of the best ways to protect your property is to sign either a prenuptial agreement if you haven’t gotten married yet, or a postnuptial agreement if you’ve been married for some time but are not approaching a divorce.
Who is Entitled to Spousal Support in Alberta?
While either spouse may apply for spousal support, it will generally be awarded to the financially disadvantaged spouse.
The amount will vary based on the amount of time the couple was together, the contributions each partner made to the marriage, any conditions set down in a prenuptial agreement, and what the financial situation of each partner looks like.
Lifetime spousal support is very rare. It’s a lot more common for spousal support to be awarded for some number of years that allows the financially disadvantaged spouse to seek new employment or training which can help them get on their feet.
How Do I Get a Divorce Without Losing Everything?
The divorceés who “lose everything,” or at least who get a very bad deal, are those who do not hire a lawyer. You need solid legal guidance and a strong negotiator on your side if you’re going to come to a livable divorce agreement.
It is also possible to “lose everything” by attempting to cheat your spouse during the process, such as by emptying the joint bank account and leaving your spouse unable to pay basic bills, or by attempting to hide assets.
Can I Empty My Bank Account Before I Get a Divorce?
If you have a personal bank account you can usually continue to use it, and there’s no particular penalty to moving or using that money. The use of assets can be a lot simpler during divorces where both spouses have separate bank accounts.
Nevertheless, you will both have to decide who is responsible for paying each of the bills as the divorce proceeds. It can take months to finalize the agreement and you may even be living together during that time. The lights will need to stay on during that time, and someone will have to pay for them.
If you have a joint bank account then all the money in that account is matrimonial property. Your spouse has the right to at least half of it, as do you…but that doesn’t mean you should race to withdraw half the money right away. Consult with your lawyer before using or taking any significant portion of that money.
It’s usually okay to continue using a joint account to pay for necessities such as your rent or mortgage, your utilities, or your groceries.
You do have the right to open your own account at any time, and to start depositing your paychecks into that account.
Just keep in mind that if you try to take all the money and run the courts will sanction you for this behavior, especially if your spouse relies on that money to survive. These sanctions can cost far more than the money you are trying to protect.
What Happens if You Hide Assets in an Alberta Divorce?
It is against the law to hide assets in a divorce. Falsifying your asset and liability statements is technically committing an act of perjury. While you will rarely go to jail for attempting to hide these assets the courts have been known to immediately award any assets that one spouse attempted to hide to the innocent spouse.
There is almost no way to hide assets cleverly enough to prevent you from losing them later. Divorce lawyers are quite adept at noticing the signs of these assets, especially those who have decades of experience. There are forensic accounting methods that can be used to find them.
You will also lose the trust of the court, which can have implications beyond the division of assets. Attempting to hide assets could have indirect custody implications, for example, as the judge may find your spouse’s portrayal of your relationship with your children to be far more compelling than your own.
Need Help With Your Alberta Divorce?
We have decades of experience handling tough divorce cases. Our team specializes in complex high net worth cases, business owner cases, entrepreneur cases, and farm divorces. We’re tough negotiators and fearless litigators who never stop looking out for your best interests.
We’ll help you fight for a fair division of assets. Call (587) 689-3333 to get matched with one of our top-notch divorce lawyers today.
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