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Indian Divorce in BC – How to Divide Assets and Debts

October 24, 2019     Family Law

Indian divorce in BC comes with very unique and challenging problems. This is because, culturally, Indians do things differently in their personal lives and marriages. One of the most significant issues facing Indians at separation is how to divide assets and debts.

There is so much gifting and intermingling of assets within Indian families that, at points, it becomes confusing even to figure out who gets 50% of what. You, your mom, your dad, your wife, your husband, your mother-in-law, etc.?

In this article, we will try to cover some unique property and debt division issues facing Indians in BC. However, please note that Indian divorce is very complicated, and sometimes fortunes are at stake. It is always best to at least have a consultation with an Indian divorce lawyer to fully understand your rights and obligations.

  • Please note, this is Part 2 of our cultural series on Indian divorce. 
  • Part 1 is about getting divorced and its effect on immigration status. 
  • Part 3 is about custody and support issues during separation or divorce. 

Indian Divorce in BC and Dividing Real Estate – Who Gets What

The biggest asset issue Indians face when divorcing in BC is the fact that often real estate, houses, businesses, etc. are purchased through communal funds – meaning the parents or in-laws of the divorcing couple often help the couple through loaning or gifting them downpayment on houses, helping them with their mortgage and expenses, etc.

Dividing Real Estate in Indian Divorce in BC

The law says that if something is a loan to the couple, it must be given back to the person who loaned it. It doesn’t need to be given back if it is a gift. But in some situations, the wife may say the downpayment was a gift, and the husband/in-laws may say it was a loan.

In these cases, the in-laws, parents or siblings of the divorcing couple get dragged into the family law case and have to prove to loan the money to get it back. Otherwise, everything will be divided between the couple and no one else. The challenge is that when the siblings or in-laws gift or loan the money, they often do not record it in writing. This is because, in Indian families, people do not enter into written contracts; most agreements are verbal and not written.

So what happens when there is a dispute on whether your parents loaned or gifted you funds to purchase your house? The law on this issue is not black and white.

How to Prove if the downpayment was a gift or a loan?

What must be determined is the intention of the person who advanced the money at the time money was given, not their intention after the fact.

A list of factors considered by the courts when determining whether the money advanced was a loan or gift are as follows:

  1. whether there were any documents evidencing a loan or gift, such as a Christmas card with a cheque inside or a note saying this is a loan;
  2. whether there were any discussions relating to how to return the loan;
  3. whether there is security held for the loan;
  4. whether there are advances to one child and not others, or advances of unequal amounts to various children;
  5. whether there has been any demand for payment before the separation of the parties;
  6. whether there has been any partial repayment; and
  7. whether there was any expectation, or likelihood, of repayment.

The court in Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795 summarized whether the transfer is a loan or a gift the best in paragraph 24:

Loan or a gift in Indian divorce

In short, to protect yourselves, always have written documentary agreements concerning the money you are loaning, gifting, or receiving.

Dividing Jewelry at Indian Divorce in BC

Gifting Jewelry at weddings and special occasions is huge in Indian culture. Indian weddings are often huge, and massive jewelry gets gifted to the spouses. At divorce, the value of the jewelry can be significant, and the couple needs to figure out who was gifted what.

Remember, under BC Family Law, if the jewelry was gifted to the wife or husband, it remains that person’s property and is not subject to 50/50 division. So the problems that can arise out of the division of jewelry are as follows:

  • Husband says the gold coin was a gift to him and not the wife. The wife says the gold coin was a gift to her.
  • The husband says the rings were gifted to both husband and wife and therefore should be divided 50/50; the wife says the rings were a gift to her;
  • The husband says all the jewelry was in a safety deposit box, and now all of it has disappeared, and the wife took it. The wife says the husband took all the jewelry from the safety deposit box.

How to Prove if Jewelry Was a Gift to You

The best way to prove if the jewelry was a gift to you is as follows:

  • Have the person who gifted it swear an affidavit or testify that the gift was for you;
  • If you can’t find the person who gifted it, get a person who was at your wedding, etc., to testify having witnessed the gift going to you;
  • If the gift came with a card and you have that card, show the card saying the gift is for you to the judge;
  • If you always had possession of the gift and did as you pleased with it, such as wearing the watch throughout the marriage, then that is evidence that it was a gift for you.
  • If it’s a woman’s necklace, then it was probably gifted to your wife only;
  • If it was a men’s watch, then it was probably gifted to your husband only;

How to Prove Your Spouse Removed Jewelry from Safety Deposit box

This one is not as straightforward. It comes down to who is more credible or believable. If throughout your trial, the judge finds that generally you are being truthful and your spouse was not, the judge may make a ‘finding’ that it wasn’t you, and it was your spouse who removed the jewelry and must pay you half the value of it.

Sometimes judges cannot discern what happened to the jewelry, and you may be left having to let go of your claim to it.

How to Divide Debt at Indian Divorce in BC

To divide debt, first, you must find out just how much the family debt is between you and your spouse. Family debt is debt accumulated during the marriage (or cohabitation) or debt accumulated after separation for keeping up the family property. This could be having to use a line of credit to maintain your house after separation.

  • First, calculate the family debt.
  • Then divide it by half.
  • Half is your responsibility, and half is your spouse’s.

In Indian divorces, parents or siblings usually loan the couple money for different things. To prove such loans, the people who made the loans will need to prove:

  • the existence of the loan – i.e.: what was the loan about, and how much was it for?
  • how it should be paid out? by cash? by selling the house and paying you off? when should it be paid? can it be paid in instalments?

Indian divorce in British Columbia can be highly complicated. Usually, many people get dragged into them. It is best to speak to an Indian Family Lawyer in BC to know your strategy and reduce your litigation cost. Call our award-winning firm to schedule a consultation at 604 974 9529 or get in touch

 

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