The Matrimonial Property Act, R.S.A. 2000, Chapter M-8 (the “MPA”) outlines how property will be divided upon marriage breakdown. The MPA only applies to couples who were legally married and resident in Alberta. It does not apply to common law or unmarried couples. The presumption is that the spouses will share their property and debts equally. The court may distribute property unequally between the parties if it would be “just and equitable” to do so.
One type of property under the MPA is matrimonial property, which is all property and debt acquired by the spouses jointly or individually during their marriage and after separation.
The second type of property is ‘Exempt Property’, which is property that is excluded from division upon separation. S.7 of the MPA sets out the ‘Exempt Property” as follows:
7(2) If the property is:
(a) property acquired by a spouse by gift from a third party;
(b) property acquired by a spouse by inheritance;
(c) property acquired by a spouse before the marriage;
(d) an award or settlement for damages in tort in favour of a spouse, unless the award or
settlement is compensation for a loss to both spouses; or
(e) the proceeds of an insurance policy that is not insurance in respect of property, unless
the proceeds are compensation for a loss to both spouses, the market value of that property at the time of marriage or on the date on which the property was acquired by the spouse, whichever is later, is exempted from a distribution under this section.
To claim an Exempt Property, a spouse must still have the Exempt Property or be able to trace the value of an Exempt Property into an existing asset.
The last type of property is the increase in value of any Exempt Property from the date of marriage to the current date. This type of property should be shared in a “just and equitable” manner between the parties.