Vancouver Excluded Property Tracing Lawyers 604-602-9000
Our Vancouver Excluded Property Tracing Lawyers understand the onus is on a party claiming an exemption for excluded property to prove it. Vancouver Excluded Property Tracing Lawyers know you need solid proof of the starting value of property you brought in to the marriage or “marriage like” relationship. Vancouver Excluded Property Tracing Lawyers also want clients to know that if their excluded property is used up or goes down in value the exemption is reduced or even lost entirely. Finally, spouse’s who want to protect their excluded property must keep careful records of how it changes and gets used to buy new replacement assets over time.
STOP- Talk To Our Senior Vancouver Excluded Property Tracing Lawyers Before You Transfer Title
Months ago, Lorne N MacLean, QC warned spouses who owned excluded property to NEVER put it in joint names or worse still the other spouse’s name without talking to skilled Vancouver Excluded Property Tracing Lawyers first. Vancouver Excluded Property Tracing Lawyers warn that too often financial advisors or other advisors improperly counsel a spouse to take steps that can irretrievably damage the excluded property entitlement.
Vancouver Excluded Property Tracing Lawyers Explain “Tracing” Excluded Property in British Columbia
Property generally includes anything with value: land, rights, money, etc. When a couple separates, there are two types of property: “Family” property, and “Excluded” property. The general rule is that Family property is equally divided between the spouses, while excluded property is retained by the spouse that ‘originated’ that property.
The most common types of excluded property are property brought into the relationship (i.e. pre-existing property), or property given to one of the spouses, either through a gift or bequeathment.
What happens, though, if excluded property is intermingled with family property, or “converted” from one form (eg. cash) to another (eg. equity in a home)? These situations have occurred in numerous cases our property division family lawyers have handled or are handling.
Vancouver Excluded Property Tracing Lawyers Explain What is Tracing?
The Family Law Act, SBC 2011, c 25 [FLA], at section 85(1) provides a definition of what excluded property is at sub-sections (a) – (f). The FLA then provides that excluded property also includes “property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).” Tracing is the exercise of determining what property ought to be excluded because it is derived from, or derived from the disposition of, other family property.
VJF v SKW
VJF v SKW, 2016 BCCA 186 is a groundbreaking decision which settled a long-time dichotomy in thinking with respect to excluded property in British Columbia. In VJF, a husband was given $2 million – this $2 millon was excluded property. He then used that money to buy a house in the sole name of his wife, so that his creditors could not get at that asset.
The court found that as the husband “gave” the property to his wife, he had “derived” nothing from the gift – he wasn’t paid for it, and he received no rights in respect of it. Therefore, it was no longer excluded property (i.e. could not be traced) under 85(1)(G). As a result, the husband was entitled to half of the $2 million as family property. This was a catastrophic result for the husband BUT the Court did say the exclusion may or may not be lost depending on the intention of the party at the time of transfer. Vancouver Excluded Property Tracing Lawyers at MacLean Family Law say – Don’t Take a Chance by registering an asset jointly!
Pearson v Pearson
In Pearson v Pearson, 2016 BCSC 671, the husband owned a property prior to the relationship began. He sold that property, and purchased a second, putting it in the joint names of himself and his spouse.
The court found that the portion of the second property paid for with proceeds from the first property were excluded. The court “traced” the excluded value of the first property through the purchase of the second property, and ascribed that value to the husband (at para 70). Vancouver Excluded Property Tracing Lawyers explain that you need to keep documents and records all the way throughout the relationship to meet the onus of Tracing.
Sardinha v Sardinha
In Sardinha v Sardinha, 2016 BCSC 348, a husband’s parents paid off $186,377.76 of the spouses’ mortgage. An inheritance is excluded property. In Sardinha, the court analogized the paying-off of the mortgage to a transfer of funds to the husband, who then used those funds to pay-off the mortgage. In doing so, the court traced this value through the property. We warn that some paydowns of a mortgage on a joint property and money used as a downpayment on a joint property from parents of one spouse can be classified as a non exempt gift to both spouses. Vancouver Excluded Property Tracing Lawyers warn that the gift of money in this case must go to only one party clearly and a waiver from the other spouse of this gift showing it belongs to one spouse ONLY and is excluded property is prudent.
Vancouver Excluded Property Tracing Lawyers Also Act In Calgary
Lorne N MacLean, QC’s recent blog on tracing property in Calgary explains the differences between Alberta tracing and Vancouver tracing of exempt and excluded property.
A lot of money is at stake and our top rated property division lawyers are here to help you make sure your division of assets is fair, and that you retain money you brought into your relationship or marriage.
Call our experienced top rated family lawyers today to meet at any of our 6 offices across BC and in Alberta in Vancouver, Kelowna, Richmond, Surrey, Fort St John and Calgary toll free at 1-877-602-9900.
