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What property is exempt from division in an Alberta divorce?

The Matrimonial Property Act (MPA) is the Alberta law used to classify and distribute property when a marriage ends. The basic presumption of the law is that matrimonial property and debts will be divided equally between the spouses.

The MPA also provides for some kinds of property to be exempt from division, and here we'd like to discuss the different kinds of property described by the MPA.

Each party to a divorce must disclose his or her property. A disclosure can be obtained in a number of ways, including the Notice to Disclose/Notice of Motion, which is provided by the Alberta Rules of Court. It is a good idea to speak with a divorce lawyer about your options for obtaining a property disclosure from your spouse if he or she isn't cooperating.

Once a disclosure of property is obtained, each item of property should be listed in one of three categories: matrimonial property, exempt property or increase in value of exempt property.

The MPA describes matrimonial property as that which was acquired by either spouse, or jointly, during the marriage or after separation. Matrimonial property, which also includes debts, will be divided equally between the divorcing spouses unless special circumstances make an equal division unfair. The MPA provides guidance regarding such special circumstances.

Under the MPA, property that is exempt from division includes the following:

  • Assets owned prior to the marriage
  • Inherited assets
  • Proceeds from a personal injury lawsuit
  • Property received as a gift from a third party
  • Insurance proceeds

For exempt property to be classified as such, there must be evidence that the property still exists or can be traced to an asset that exists. When it is possible to prove that property is exempt, then the property's market value when the marriage started or when the asset was acquired will be exempt from division.

However, if the value of the exempt property has increased during the course of the marriage, then the increase in value may be divided between the spouses. The MPA does not assume that this increase in value should be divided equally. Rather, the law assumes that this value should be divided equitably and not necessarily down the middle.

An Alberta matrimonial property lawyer can explain your full range of options if you have questions about any of these matters.

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