A property settlement after separation in BC is worked out asset by asset

How do we divide property and debt by agreement in BC?

In five moves: list everything either of you owns or owes, put a value on each item that you both accept, decide how to even out the totals, sign an agreement that meets the Family Law Act's formalities, and then carry it out asset by asset. Each move depends on the one before it being finished.

The legal framework, briefly. Under Part 5 of the Family Law Act, family property is what either spouse owns at separation, in BC or elsewhere, minus excluded property (s. 84 and s. 85). Family debt is debt taken on during the relationship, plus later debt to maintain family property (s. 86). Each spouse is entitled to half of the one and responsible for half of the other (s. 81). Values are fair market values at the date of the agreement (s. 87), and the agreement binds on property once written, signed by both and witnessed (s. 93).

A court can order an unequal split where an equal one would be significantly unfair (s. 95), but that is contested family litigation, which Ng Sidhu Law handles (ngsidhu.com). Property claims also carry a limitation period under s. 198.

What goes on the list of family property and family debt?

Everything either spouse owns or owes on the date of separation goes on the list, wherever it is, including property outside BC. Assets that may be excluded, such as something owned before the relationship, a gift or an inheritance, are listed too but flagged, with records of their value when they came in. Debts go on the same list.

The spouse claiming an exclusion has to prove it, so records matter: a statement from the start of the relationship, an estate statement, a gift letter. Without them, couples often agree on a figure. A tracing dispute that can't be agreed is court work for Ng Sidhu Law.

• Real estate: the family home, rental or recreational property, land outside BC or Canada, and presale contracts.
• Registered accounts: RRSPs, RRIFs, TFSAs and RESPs, with statements near the separation date and current ones.
• Pensions: workplace and federal plans, with the latest plan statement.
• Business interests: private company shares, a sole proprietorship or partnership, and money the business owes either spouse.
• Other assets: bank accounts, investments, vehicles, cryptocurrency, valuable contents, and money owed to either spouse.
• Debts: mortgages, lines of credit, car loans, credit cards, tax owing, and loans from family.
• Possibly excluded: pre-relationship assets, third-party gifts and inheritances, and some injury settlements, with records of their starting value.

How do we value the house, a pension or a business?

Each asset has its usual method. A house is valued by an appraisal or by a figure both spouses accept. A pension is valued or divided through the plan under Part 6 of the Family Law Act. A private business usually needs a business valuator. By default, values are fair market values as of the date of the agreement.

Because values are taken at the date of the agreement rather than separation (s. 87), an early figure may need updating before signing.

• The home: an appraisal gives a figure both spouses and a lender can rely on, or spouses who know the market can agree a value from nearby sales or a realtor's opinion and record how they reached it.
• Pensions: under Part 6, divided at source, with the plan paying each spouse a share, or valued and offset against other property.
• A business: private company shares have no market price, so a business valuator usually values them, including the tax a sale would trigger.
• Tax and costs: an RRSP is worth less than its statement balance once withdrawal tax is counted, and keeping a home avoids a commission but carries other costs. Capital gains and the principal residence exemption are questions for an accountant before values are final.

If one of us keeps the house, how do we even things out?

The spouse leaving the house is compensated in one of three ways: by taking an equal value of other property such as RRSPs or a pension share, by a cash payment usually funded by refinancing, or by agreeing to sell the house later and split the proceeds. Each route has its own transfer and tax steps.

Where spousal support is traded against property, such as more equity in place of monthly payments, the support side has its own rules, and a dispute over it goes to Ng Sidhu Law's spousal support practice (ngsidhu.com). The guide to separating when you own a home covers the full decision, including a spouse who can't qualify alone.

• Offsetting: the departing spouse takes more RRSPs, pension or other assets to match the home equity; RRSP transfers use CRA Form T2220 to defer tax, and the arithmetic should use after-tax values.
• Cash funded by a refinance: the spouse keeping the home refinances alone, the new loan pays out the old mortgage, and the balance goes to the other spouse, closing together with the title transfer.
• Deferred sale: both stay on title until a set event, such as a sale date or a child finishing school, with the agreement fixing who lives there, who pays, and how proceeds are split.

How do I take my spouse off title and the mortgage?

Title and mortgage are separate steps. Title changes by a transfer registered at the Land Title Office, which can be exempt from Property Transfer Tax when made under a written separation agreement or court order. The mortgage changes only if the lender agrees, usually by a refinance or by approving the remaining spouse to carry it alone.

The transfer is a Form A freehold transfer, registered electronically with the Land Title and Survey Authority, with a Property Transfer Tax return claiming the exemption; the separation agreement supports the claim.

Coming off title doesn't take a spouse off the mortgage. A borrower stays liable until the lender releases them, usually only when the remaining owner qualifies alone or a new loan pays the old one out. That holds whichever spouse you are. The title transfers and refinancing pages cover each step.

Where the home is in one spouse's name only, the other can generally register an entry under the Land (Spouse Protection) Act, which stops a sale or mortgage without their consent while terms are worked out; a dispute about it is a court matter.

How are RRSPs and pensions divided under a separation agreement?

RRSPs move by a transfer from one spouse's plan to the other's, which the Income Tax Act allows without immediate tax when it follows a written separation agreement or court order; CRA Form T2220 records it. Pensions are divided through the plan administrator under Part 6 of the Family Law Act. Federal plans and CPP credits follow separate processes.

The RRSP transfer has to go plan to plan: cash withdrawn and handed over is taxed as the withdrawing spouse's income. RRIFs can move the same way.

Under Part 6, the plan administrator first supplies the information needed, using forms set by the Division of Pensions Regulation. The spouses then divide the pension at source or agree a value and offset it, and a pension not yet paying out can still be divided.

Federal plans, such as the public service, Canadian Armed Forces and RCMP plans, are divided under the Pension Benefits Division Act. Canada Pension Plan credits earned during the relationship are split through a separate application to Service Canada.

Who pays the debts after we separate?

Between the spouses, the agreement decides who pays each family debt, but it doesn't bind the lender. A creditor can still collect from anyone who signed for the debt. That is why agreements pair each debt with an indemnity, and why joint accounts and cards are closed or moved into the name of the spouse who takes them on.

• Indemnity: the spouse who takes a debt promises to pay it and to cover the other if the lender pursues them.
• Joint credit: joint lines of credit and cards are closed or frozen, or converted into one spouse's name with the lender's approval.
• Refinancing into one name: a car loan, line of credit or mortgage is replaced by a new loan in the name of the spouse keeping the asset.
• Debt in one name only: if it is family debt, it counts in the split even though the lender can collect only from the spouse who signed.