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Is certain matrimonial property exempt from division?

Mar 3, 2021 | Property Division

When a couple decides to divorce or separate, they must work through a process filled with complex negotiations and challenging compromises. If there are children, the couple will face discussions centering on support and parenting plan matters such as custody and visitation. Additionally, the divorcing couple will need to negotiate their individual financial futures which can include property division, division of debt responsibility and spousal support.

When a marriage comes to an end in Alberta, the Matrimonial Property Act (MPA) is used to classify and distribute assets. While the divorcing couple will often focus on the division of personal property, the division of real property and the division of digital assets, the MPA allows for certain exemptions. Assets meeting specific requirements are exempt from division. These assets can include:

  • Assets that were clearly owned prior to the marriage
  • Assets that were inherited specifically by one spouse
  • Assets that were received by one spouse as a gift from a third party
  • Proceeds that one spouse receives from a personal injury lawsuit
  • Insurance proceeds

Unfortunately, the MPA does not take any value increase into consideration. If the value of an exempt property has increased through the duration of the marriage, this increase in value may be divided. In these situations, the value increase is not likely to be split equally, but, rather, divided equitably in conjunction with the other assets and debts.

When divorce becomes a reality, it is wise to seek the guidance of an experienced matrimonial property lawyer. Even if you and your spouse are in agreement over most matters, you might face complexities through the process that will require a legal professional’s attention.

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