Promptly exchanging all financial disclosure is key to a quick resolution
If your goal is to avoid court and come to a quick resolution about the division of the matrimonial property between you and your spouse, then it is important to know that you and your spouse must exchange a list of all your assets and debts, as well as any supporting documentation that either one of you would like to see.
Under the Matrimonial Property Act (“MPA”) of Alberta you and your spouse can divide your property in any manner you agree, provided that:
- You understand the agreement that you have reached; and
- You follow the formal requirement of the MPA.
Understanding the agreement means being aware of your entitlements and responsibilities under the law, as well as knowing the rough arithmetic of net assets you and your spouse will each receive. Understanding the arithmetic is a two-step process, though frequently the steps are done at the same time. First you identify the assets and debts, and secondly, you need to value the assets and debts.
In the Collaborative Family Law Process, the spouses and lawyers work together to build a common understanding of what assets and debts exist and then share the documentation in a formalized and organized way. However, you’re in control of the process and if you and your partner have already started compiling and sharing the documents between yourselves, or you have a tentative agreement, simply provide that information to your Collaborative Lawyers.
Begin by identifying your assets and debts
The first step when talking about matrimonial property in the Collaborative Family Law process is to identify what assets and debts exist. For example, you and your spouse may each have a vehicle, or one of you might have a Tax-Free Savings Account that the other did not realize even existed. Sometimes there is also a debt that one of the spouses does not know about. Honesty plays a large role in financial disclosure; hiding information about assets and debts can have a harmful impact on your ability to reach an agreement and can even be grounds for an agreement to be overturned years later.
The second step is to value the asset or debt. Spouses are free to agree upon a valuation date, and it typically makes sense that the valuation date is the same for all assets and debts.
Some assets are easy to value, such as the balance in a bank account or a Tax-Free Savings Account. Some assets are trickier to value, such as RRSPs or investments that may have taxable consequences. Some assets can be very difficult to value, such as vehicles and houses, and professional appraisers or valuators may be relied upon where the spouses cannot agree.
Your Collaborative Family Law team comprised of collaborative divorce lawyers and financial specialists will guide you through the process of identifying and valuing all of your matrimonial property, and then help you choose between the different options about how you can divide your property.
Get a head start on compiling your financial documents
If you and your spouse want to get a head start you should exchange the following documents with each other:
- Three years of Income Tax Returns and Notices of Assessment;
- Three recent paystubs;
- Any other documents regarding income or government assistance you are receiving;
- Six months worth of all bank account and investment statements;
- Six months worth of all debt statements, such as credit cards, lines of credit, loans, or mortgage information; and
- A list of all of your assets and debts (maybe do not include the coffee pot, but household contents of significant value might be something you and your spouse want to talk about);
Getting legal advice and finalizing your agreement
Dividing property in a divorce can be simple, but can also have complexities. Child or spousal support payments or household expenses sometimes create problems to work through. Changes in assets and debts after separation could be a factor. Some assets may also not be divisible because they are exempt, such as with assets owned prior to marriage (however, even exempt assets must still be disclosed, and an agreement reached about what to do with each asset and debt).
Your Collaborative Family Law lawyers can help guide you through the maze of matrimonial property law, but the process may be more efficient for you and your spouse if you already both have an understanding of your family’s assets and debts.
The MPA formal requirements include that your agreement must be in writing, signed separate and apart from your spouse, and you must obtain independent legal advice from a lawyer. But you can leave those formalities to your lawyers to explain and handle as part of the Collaborative Family Law Process.