Manitoba Justice
To view PDF files, you must have a copy of the Adobe Acrobat Reader which is available as a free download.
Family Justice
Family Law
Family Law in Manitoba - 2008 Edition
Chapter 9
|
View Chapter |
- Property Covered by The Family Property Act
- Accounting and Equalization of Family Property
- Orders for the Preservation of Property
- The Family Home
- The Family Farm
- Sharing of Pension Benefits Between Spouses or Common-Law Partners
PROPERTY
Before June 30, 2004, Manitoba's family laws dealing with property did not apply to people who were living together but not legally married; these laws only applied to married spouses. On June 30, 2004, a new law came into effect that changed this. The Common-Law Partners' Property and Related Amendments Act changed the name of The Marital Property Act to The Family Property Act and it extended this and many other property laws, such as The Homesteads Act, to common-law partners who have either registered their relationship with the Vital Statistics Agency or who have lived together for a specified period of time. A pamphlet about these changes to the property sharing laws is available at:
www.manitoba.ca/justice/family/commonlaw/commonlawbrochure.pdf
For unmarried partners who permanently separated before June 30, 2004 or for partners who have neither registered their relationship with the Vital Statistics Agency nor lived together for at least three years, the remedies and protection respecting property under that legislation does not apply to them. These partners have no right to any property solely owned by the other partner unless the partner can prove to the court that he or she contributed to acquiring, improving or maintaining the property and should be compensated for that contribution. Unmarried partners, like legal spouses, have equal rights to property that they jointly own.
In Manitoba, The Family Property Act sets out the rules for dividing the value of family property between spouses or common-law partners. In general, family property is any property that either or both spouses have acquired while married and living together, or that either or both common-law partners have acquired while they have cohabited. If a couple cohabits for a time immediately before their marriage, the property they acquire during cohabitation is also family property. The basic rule is that both spouses or common-law partners have a right to an equal share in the value of family property when they separate, no matter which one owns the property or where it is located.
The law recognizes that, whether a spouse or common-law partner is responsible for running the household or for earning the family income, the contribution to the relationship is of equal importance and should be given equal weight in dividing family property between the parties.
The Family Property Act applies to all married persons (spouses) living in Manitoba, no matter where they were married or how long they have been married. It does not apply to spouses who were living separate and apart before May 6, 1977 and have not lived together for more than 90 days since then. If one or both spouses no longer live in Manitoba, the act will apply only if Manitoba was the last place they lived together.
The Family Property Act also applies to all common-law partners who have either registered their relationship with the Vital Statistics Agency, or lived together in a conjugal relationship for at least three years. Even though this law, as it applies to common-law partners, has only been in effect since June 30, 2004, the changes made by the act apply to people who were already living together when it came into force. If a couple was living together for three or more years as of June 30, 2004, The Family Property Act applies to them immediately. If a couple has been living together for less than three years as of June 30, 2004, The Family Property Act will apply to them as soon as they have completed the three years. It does not apply to couples who permanently separated before June 30, 2004.
PROPERTY COVERED BY THE FAMILY PROPERTY ACT
Under the act, the value of all assets owned by either or both spouses or common-law partners, including real estate, money, investments, vehicles and jewelry, must be shared by them. There are some exceptions:
Property acquired before the marriage or before the common-law couple began living together will not be included unless it was acquired in contemplation of the relationship. However, any increase or decrease in the value of such property during the relationship must be shared. For married couples who lived together immediately before they married, any property acquired during the time they lived together must also be shared.
Property dealt with in a written agreement between the spouses or common-law partners will not be shared unless a court has set the agreement aside. Those who do not want The Family Property Act to apply to their property must clearly say so in writing. This agreement may be made before or during the relationship, or upon its breakdown, and must be very carefully drawn up. (See, Chapter 4, Separation and Divorce.) Each spouse or partner should see his or her own lawyer before signing such an agreement.
Compensation received by one spouse or common-law partner for a personal injury or disability will not be shared unless it was to compensate for a loss suffered by both spouses or partners.
A gift or inheritance received by one spouse or common-law partner from a third person will not be shared unless the giver intended to benefit both spouses or partners. However, if the gift or inheritance is of extraordinary value, this value may be taken into account in determining how commercial assets will be shared.
Property equally owned by both spouses or common-law partners (jointly owned property) is not shared under The Family Property Act, as each spouse or partner already owns onehalf of this property in law. Often the family home is jointly owned, so both spouses or common-law partners must agree in writing to any sale, mortgage or other transaction involving it. If spouses or common-law partners cannot agree to the sale of a jointly owned home, an application to have the property sold and the proceeds divided can be made to the court under The Law of Property Act.
Property acquired by one spouse or common-law partner after the couple separated will not be shared between them.
ACCOUNTING AND EQUALIZATION OF FAMILY PROPERTY
Each spouse or common-law partner is entitled to an accounting and equalization of family property and may apply to court to enforce this right, if necessary.
Where a court has granted a divorce and the issue of family property has not been dealt with, either ex-spouse may apply to the court for an accounting and equalization of assets. This application must be made within 60 days after the divorce takes effect. For common-law partners who have registered their relationship with the Vital Statistics Agency, either partner may apply to the court for an accounting and equalization of assets, but the application must be made within 60 days after registering the end of the relationship with the Vital Statistics Agency. For common-law partners who have not registered their relationship, the application must be made within three years from the date the common-law partners separated.
An accounting involves the preparation of a complete list of assets and debts by each spouse or common-law partner. The list must show the value of each asset and the amount of each debt on the date of separation. If a spouse or partner will not provide such a list voluntarily, the court may order it.
The court will determine the total value of the assets each spouse or common-law partner must account for. It will then determine how much the spouse or common-law partner with more should pay to the other (an equalization payment) so that each may have an equal share of the assets. The court does not divide the assets themselves. However, it can order that ownership of an asset be transferred from one spouse or partner to the other to satisfy an equalization payment.
In some cases, the court may decide that the assets should be shared unequally. This depends partly on whether the asset is a family asset or a commercial asset. The court may divide family assets unequally only if it is satisfied an equal division would be grossly unfair because of extraordinary circumstances. Judges have slightly more discretion to divide commercial assets unequally, but must be satisfied that it would be clearly unfair to share them equally.
Under The Family Property Act, property that is used for family purposes, such as shelter, transportation or recreation, is a family asset.
Some examples are:
the family home
household furniture
the family car
a summer cottage
money in savings, chequing or current accounts (where this money is used for family purposes)
rights under life or accident and sickness policies or annuity policies
registered retirement savings plans (RRSPs)
Family property that is not a family asset is a commercial asset. Some examples are:
an interest in a business such as a drugstore, construction company, medical or law practice
a life insurance policy or accident and sickness insurance policy taken out solely to provide compensation for loss to a business undertaking due to death or illness of the insured person
The special nature of a farm may make it both a family and commercial asset.
A farmhouse, and that part of the farmland necessary for the enjoyment of the farmhouse, are considered the family home and therefore a family asset. The rest of the farm property may be a commercial asset.
When deciding whether the assets should be shared unequally, a judge cannot consider the conduct or actions of the spouses or commonlaw partners unless that conduct amounts to dissipation. Dissipation is conduct that seriously threatens the financial security of the family. For example, if one spouse or common-law partner has given an excessive gift to another person, the court will take the value of this gift into account to reduce that person's share in the family property. However, this can be done only if the other spouse or common-law partner has applied for a division of family property within two years of discovering that this gift was made.
An unequal division of family or commercial assets is very rare.
ORDERS FOR THE PRESERVATION OF PROPERTY
A spouse or common-law partner who has applied to the court for a division of family property may also ask for an order to preserve property. This order prevents the other spouse from destroying, irresponsibly selling or giving away, or removing property from Manitoba before the court has dealt with the family property.
THE FAMILY HOME
One of the most important family assets is the family home. This is any property used as a family residence. It may be a house, apartment, trailer or condominium.
The Homesteads Act of Manitoba gives special protection to the family home. Where the home is owned by one spouse or common-law partner only, the other spouse or partner must consent in writing before it can be sold or mortgaged. If the owner spouse or common-law partner should die, the non-owning spouse is entitled to continue living in the family home for the rest of his or her life, even if the owner's will leaves the home to someone else. To qualify as common-law partners under The Homesteads Act, a couple must have either registered their relationship with the Vital Statistics Agency or they must have cohabited in a conjugal relationship for at least three years. If the spouses or common-law partners have been living separate and apart for at least six months, or a court has declared the non-owning spouse or partner to be mentally disordered, the court may allow the transaction to take place without the consent of that spouse or partner. In such a case, the court may also attach conditions to the transaction to protect the non-owning spouse or common-law partner.
Under The Homesteads Act, only one spouse or common-law partner at a time can have these special rights in the family home. If the homeowner brings a second or subsequent spouse or common-law partner to live in the home, that spouse or partner does not acquire homestead rights until the rights of the first spouse or common-law partner have been properly dealt with.
THE FAMILY FARM
The special protection consent given the family home under The Homesteads Act also applies to the family farm. This legislation applies to not only the farm dwelling, but also up to 320 acres of land.
SHARING OF PENSION BENEFITS BETWEEN SPOUSES OR COMMONLAW PARTNERS
Both the Canada Pension Plan and The Pension Benefits Act of Manitoba provide for sharing of pension benefits between either same-sex or opposite-sex common-law partners in certain circumstances. There is no legislation similar to The Family Property Act that would require a common-law partner with an occupational pension in a federally regulated industry, such as banks and airlines, to share his or her pension. However, these pension assets can be divided between former common-law partners by a court order or a written agreement.
Most people over age 18 who are employed pay into the federal Canada Pension Plan (CPP). CPP provides three kinds of benefits:
disability benefits (including benefits for dependant children of disabled contributors)
survivor benefits (including a death benefit, survivor's pension and a children's benefit)
retirement pension
The amount of any retirement pension will depend on the length of time the person has worked and the amount he or she has contributed to the plan.
Pension credits earned under the plan by either spouse during their marriage or by either common-law partner during the time they lived together, may be divided equally between them upon divorce or separation. In this way, a spouse or common-law partner who has worked in the home throughout the relationship, and therefore could not contribute to the plan, will receive some pension benefits upon retirement of the other spouse or partner.
In October of 2005, a three year pilot project began to simplify the process of splitting CPP credits upon marriage or relationship breakdown. The project provides information on CPP credit splitting to divorcing spouses and separating spouses and common-law partners when domestic proceedings begin in court. It also provides an easier process to request a credit split. The pilot project is in effect until October 1, 2008, but it may be extended beyond that date. Further information on the CPP Credit Splitting project can be obtained from the Manitoba Courts website:
www.manitobacourts.mb.ca/cpp/cpp_credit_spliting.html
To qualify as common-law partners, a couple must have lived together in a conjugal relationship for at least one year and they must have separated on or after January 1, 1987. Under the current pilot project, a separated common-law partner may apply for a division at any time following the separation, but the federal government will not process their request and split CPP credits until they have been separated at least 12 consecutive months. Separated common-law partners must also apply within four years from the date of separation.
Spouses who separated or divorced on or after January 1, 1987, and lived together for at least 12 consecutive months during the marriage, can obtain a share of the other spouse's credits.
The current pilot project allows a separated spouse to apply for a credit split at any time after the separation, but the federal government will not process their request and divide credits until they have been separated for at least 12 consecutive months. If one of the spouses dies, the application must be made within three years of the death. Divorced spouses can ask for a division at any time after the divorce.
The provisions of a spousal or common-law partner agreement signed before June 4, 1986, may prevent a division of Canada Pension Plan credits. If a couple's family property is governed by Manitoba law and they signed an agreement on or after June 4, 1986 to opt out of credit splitting, they are not bound by that agreement. They still have the right to a division of the credits.
For further information on the division of Canada Pension Plan credits, contact Service Canada:
- in person
- Winnipeg: 181 Higgins Avenue
- 614 Des Meurons Street
- 391 York Avenue
- 1122 Henderson Highway
- 1031 Autumnwood Drive
- 3338 Portage Avenue
- Brandon: 1039 Princess Avenue
- by telephone
1-800-277-9914 toll free (English)
1-800-277-9915 toll free (French)
1-800-255-4786 toll free (TTY)
- by mail
Service Canada
Income Security Programs
P.O. Box 818 Stn. Main
Winnipeg MB R3C 2N4
- by Internet
The Pension Benefits Act applies to pension plans sponsored by an employer for employees in Manitoba. It does not apply to the Canada Pension Plan, to federally regulated pension plans (Ex: plans for employees of banks and airlines), to federal government employees or to personal retirement savings plans (such as RRSPs).
If spouses were separated or divorced on or after January 1, 1984, pension benefit credits earned during the marriage by either spouse may be divided equally between the spouses, unless they agree not to divide the pension.
If an unmarried partner has a pension governed by The Pension Benefits Act, his or her common-law partner may be entitled to share the pension credits in some circumstances. To qualify as common-law partners under this law, a couple must have registered their relationship with the Vital Statistics Agency, or they must have cohabited in a conjugal relationship for at least three years if either of them is married, or they must have cohabited in a conjugal relationship for at least one year if neither of them is married. Before June 30, 2004, the pension owning partner had to opt into the sharing provisions by filing with the pension plan administrator a declaration in a prescribed form. This requirement to opt in was repealed as of June 30, 2004. Commonlaw partners may also make agreements not to divide their pensions.
However, an agreement not to divide a pension is valid only if it is written in a prescribed form. In addition, before signing, each spouse or common-law partner must obtain independent legal advice and receive a statement from the pension plan administrator specifying the pension benefits to which they would have been entitled under the act.
The portion of pension benefit credits to which a spouse or common-law partner becomes entitled under this act is transferred directly to that spouse or partner, but not in funds. Instead, he or she must transfer the credits directly to his or her own pension or retirement benefit plan, or to a locked-in RRSP. If the credits are transferred to a locked-in RRSP, the spouse or common-law partner may purchase a life annuity at any age.
Amendments to The Pension Benefits Act were passed by the Manitoba Legislature in April, 2005, but are not yet in effect. The Pension Benefits Amendment Act will make a number of important changes to the law relating to pensions in Manitoba including:
allow a surviving spouse or common-law partner to receive pre-retirement death benefits only if the spouse or common-law partner was cohabiting with the pension holder immediately before his or her death
allow up to half the pension benefit credits of a pension holder to be withdrawn and placed in certain, not locked-in retirement savings funds, but only with the consent of the holder's spouse or common-law partner
allow for spouses or common-law partners to waive their rights to certain kinds of benefits
provide two new ways to trigger the splitting of pensions on relationship breakdown
To find out the status of this proposed new law, check the Bill Status Chart on Manitoba's Legislative Assembly website at:
www.gov.mb.ca/legislature/bills/billstatus.pdf.
For more information about obtaining a division of pension benefits under The Pension Benefits Act, contact:
Manitoba Pension Commission
1004 - 401 York Avenue
Winnipeg MB R3C 0V8
Phone: 945-2740
Fax: 948-2375
Toll free: 1-800-282-8069 (Ext. 2740)
Some people save for retirement through personal retirement savings plans such as RRSPs. RRSPs are considered to be family assets and would be included in an accounting and equalization of assets. On November 1, 2007, a new law came into effect in Manitoba: The Registered Retirement Savings Protection Act. This law states that money in a registered plan such as an RRSP is generally exempt from any enforcement process; it cannot be garnished or seized to satisfy debts of the RRSP holder. However, there are some important exceptions; the new act does not prevent enforcement against RRSPs to satisfy a Family Property Act judgment or enforcement of a support obligation by a designated officer of the Maintenance Enforcement Program.
Occupational pensions not covered by The Pension Benefits Act can be shared under The Family Property Act, which deems pensions to be family assets. For more details about the division of family assets, see pages 59 to 62. Often the court will direct that this kind of pension be shared by ordering the pension plan member to pay his or her spouse or common-law partner a share of the pension if and when the member receives it.
Federally regulated pensions are shared under The Family Property Act. If all or part of a person's pension benefit in a federally regulated pension is awarded to his or her spouse or common-law partner under a court order or written agreement, the spouse or partner is entitled to his or her portion on presenting the order or agreement to the pension plan administrator. However, the spouse or partner does not get his or her share in funds. Instead, the pension benefit must be transferred to his or her own pension or retirement benefit plan, or to a locked-in RRSP. For more information about federally regulated pensions, contact the Office of the Superintendent of Financial Institutions Canada toll free at 1-800-385-8647; website:
