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People say love is grand, and divorce is a hundred grand. Or, in the case of Johnston v Johnston Estate, divorce is at least six hundred grand…

The division of family property is a common source of stress during separation. The presumption is to split everything equally- imagine cutting your house, furniture, and bank accounts in half. Unfortunately, the process is not that simple and it can take years to resolve family law issues. You may wish to separate without the hassle of negotiating with your ex or going to court.

dividing property

However, failing to deal with family property in a timely manner can have drastic consequences. This was recently discussed by the British Columbia Supreme Court in Johnston v Johnston Estate, 2015 BCSC 1479. Here, the parties separated in 1971 but did not divorce or sign a separation agreement. They never dealt with the family home, valued at about $40,000 then. David Johnston left the house and did not make any mortgage payments towards it, but his name remained on title. Now, 44 years later, the court held that Mr. Johnston is entitled to one-half of the interest in the property. He obtained an order for sale and received 50% of the house’s current value of $1.2M. What would have been about $20,000 in 1971 became $600,000 in 2015.

Ms. Johnston is deceased, but her estate argued against Mr. Johnston. Her son claimed that the parties had reached a verbal agreement wherein Mr. Johnston would not pursue an interest in the property if she would not seek spousal support from him. Unfortunately, with no written separation agreement or other evidence, this was not proven in court. Ms. Johnston’s estate and beneficiaries paid a very high price as a result.

Procrastination has no place in the legal world. Although it may seem challenging, deal with family property and debt issues when separation occurs. Talk to your lawyer about drafting a separation agreement or going to court for an order. Especially with the current trend of rising Vancouver property values, the stakes in these disputes are high. BTM Lawyers is here to help.

Read the judgment here.

By Peter Schmidt and Lauren Read

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