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Categorizing Assets
My question is I wanted to transfer some land my family has in which I hold a one fifth undivided interest into a tenants in common status to protect the interests of my son in that under the latter it would go to him, my wife has placed a lis pendens against the title. He is under her custody by court order. Can I get the lis pendens dismissed and does she have any right to the land and house if it came to me by inheritance? (by G of Powell River, BC) Your question is a bit complex. Let me first describe the basic principles. A family asset is any asset which is ordinarily used for a family purpose or intended to be used for a family purpose. A good example of the former is the family car or the family home. An example of the latter is a pension or a plot of vacant land which was intended to be used to build the family home. In these last examples, the pension money and the land was intended to be used for a family purpose at some point in the future, retirement income to benefit the family or to build the family home. Inheritances are, generally speaking, not family assets. They usually fall under the heading of exempt personal property and aren't divided between spouses. Of course, inheritances can *become* a family asset. Say an inheritance was used as the downpayment for the family home. In ten years, while you can still point to the house and say $20,000 of it's value is my inheritance, by using it as the downpayment, it takes on the flavour of a family asset since it was used for a family purpose. So. Your question about the interest you have in the land will depend on whether your family ever used that interest for a family purpose or intended to use it for a family purpose. You've got a good argument that your wife shouldn't be entitled to share in it, but she may have some good arguments of her own. Whether she has a share will depend on how successful you are in characterizing your interest in the property. As to the lis pendens, or the CPL as they are now known, such things are very difficult to remove from the title. In general, only the person who placed the CPL is able to lift it. A court can make an order that it be lifted, but the Land Title Act (which governs these things) has a lot of restrictions that you'll have to meet first. If I remember correctly, CPLs are dealt with somewhere between sections 200 and 225 of the Land Title Act... Now, the CPL may not pose a problem if you want to convert your interest from a joint tenant to a tenant in common, since all a CPL does is signal to the world that "the title to this property may change as a result of litigation." All you're doing is changing the nature of the ownership, not the fact of ownership. As to whether you should do this or not, I strongly recommend that you consult a family law lawyer. I am concerned that your attempt to fiddle with the property could be interpreted by the court as an attempt to wrongfully transfer the title so as to frustrate your wife's interest. If the court makes an adverse finding like this, you could face some very adverse consequences. All things considered, your situation is sufficiently complex that you really ought to see a lawyer. Unfortunately, I can't give you a better or more definitive answer without knowing a lot more about your situation. Click here to go to the top of the page. If my common law spouse of 4 years has won a lottery of over $500,000.00, is this considered a "family asset"? Can my ex, who has custody of our two teen children, claim any part of these winnings or simply ensure post secondary education costs? (by R of Coquitlam, BC) The only people who have "family assets" are married people. Common-law couples are excluded from the part of the Family Relations Act which deals with the division of assets, and if in partner wants to claim an interest in property owned by the other partner, he or she must do so under the law of trusts. There is no automatic presumption, as there is under the Family Relations Act, that the parties have an equal entitlement to share in the family assets. Even if you were married, I would suggest that your partner's lottery win would not be a family asset, since windfalls like that usually fall outside of what are considered to be "family assets." Of course, things like lottery winnings and inheritances can become a family asset if they are used for a family purpose, like putting a down payment down on a house. Either way, your ex-spouse will not have a claim to your common-law partner's lottery win. That's hers and hers alone; it was never one of the family assets you and your ex-wife had. Moreover, it has nothing to do with your child's post-secondary expenses or your payment of child support. You can rest easy. Click here to go to the top of the page. I'm in the process of separating from my husband I'm due to recieve an inheritance very soon. Is my husband entitled to half of this money? (by K of Maple Ridge, BC) The quick answer to your question is no. He's not entitled to share in your inheritance unless you (foolishly) use it for a family purpose. When you get your inheritance tuck it into a brand new account that only you have access to. Inheritances are normally do not qualify as shareable family assets. Have a look at the "Family Assets" section of my website for more information on the characterization of assets as "personal assets" and "family assets." Click here to go to the top of the page. I own a large quantity of shares in a privatly held business that I helped get of the ground. Will my wife get 50% of them? She had no input into the creation of this business nor did she contribute any money. Is this a family asset or a business asset? (by S of Cyberspace, BC) Your question is, frankly, a bit difficult to answer in any event, since there is a lot of additional information I'd need to give you a properly informed answer. What I can tell you is this: if the shares generated money for the support of the family, or were expected to generate money for the support of the family, they probably qualify as a "venture" and as such are likely a family asset. On the bright side, she's only going to be entitled to half the value of the shares, not half OF the shares, assuming of course that she's found to be entitled to an equal division of the family assets. Since the company you've helped establish isn't public, the value of the shares is somewhat subjective. Think of it like this: if the company crashes and burns, the shares are worthless; if the company goes public, the value of the shares is likely to be their value after the initial bubble following the IPO. Right now, the value of the shares is going to be very difficult to determine. The essential problem you have is whether the shares were intended to generate income for the family, either now or in the future. The bright side is that for so long as the company is private, the value of the shares is highly subjective and susceptible to being painted in a very poor light. Click here to go to the top of the page. My cousin and her brother own a business operating a rental property and a house that they inherited. The company pays each a monthly dividend and the house is rented and pays each a monthly draw. They own the house as tenants in common. The brother and his wife are getting divorced. I need to know if she can get any shares or has any claim to the value of the real estate in the company? I also need to know if she has any claim on the rental house and if so is it based on the assessed value? The income from the company and the house is put towards normal family expenses. (by Anonymous of Cyberspace, BC) Your concerns are well-founded but quite complicated. I encourage you to meet with a family law lawyer who has a special focus on property matters to get proper legal advice about the rental property and the company. I'll tell you what I think based on your email, but you could really use some proper legal advice. Yes, the company and the rental property are both exposed to a claim by the brother's wife. Briefly put, the deal is this: everything hangs on whether or not the company and property qualify as "family assets" subject to division between the brother and his wife. The brother's interest in the company is probably a family asset, so long as the money he earned from the company was spent on family expenses. Bear in mind that it's only the brother's interest that she has a stake in. Now, the court won't actually give her shares (except in exceptional circumstances), what they'll do is require your brother to compensate her by paying her an amount equal to the value of her interest in the brother's shares. The court won't impose a brand new shareholder on a small company. The brother's interest in the property will also be a family asset if the proceeds the brother got from the property were spend on family expenses. Again, the court won’t make his wife a new owner and the court won't expand her interest to anything beyond the brother's interest. If the property is found to be a family asset, he'll have to buy her out by paying to money equivalent to her interest in his share in the property. Bear in mind that there is no guarantee that these assets will be found to be shareable family assets. Finally, the value of the property is the equity in the property, that is, its resale value less the mortgage and any other encumbrances on the title. The likely sale price is usually deterimed by a proper appraiser and is not based on the BC Assessment value. Click here to go to the top of the page. Site Navigation Go back to the Q&A Index. Section Menu
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