Divorce is a challenging and emotionally taxing process, and one of the most significant concerns for many individuals is protecting their hard-earned assets. In Yukon, family law follows specific guidelines for property division, and understanding these rules can help you safeguard your financial future.
Whether you’re considering marriage, already married, or facing the possibility of divorce, this guide will provide actionable strategies to protect your assets while staying within Yukon’s legal framework.
Understanding Yukon’s Matrimonial Property Laws
Before diving into asset protection strategies, it’s crucial to understand how Yukon handles property division in a divorce.
1. Yukon Follows the “Family Property” Model
Under the Family Property and Support Act, Yukon divides property acquired during the marriage (known as family property) equally between spouses upon divorce. This includes:
- Real estate (family home, rental properties)
- Bank accounts and investments
- Vehicles, businesses, and pensions
- Household items and valuable personal property
Excluded property (separate property) typically includes:
- Assets owned before marriage (unless they’ve significantly increased in value due to joint efforts)
- Inheritances and gifts received by one spouse (if kept separate)
- Court-awarded damages (e.g., personal injury settlements)
However, if separate property becomes intermingled (e.g., depositing an inheritance into a joint account), it may lose its protected status.
2. Common-Law Couples Have Different Rules
In Yukon, common-law partners (living together for at least two years) have limited property rights compared to married couples. They may only claim property held jointly, meaning assets in one partner’s name usually stay with that person.
Proactive Strategies to Protect Your Assets
If you want to minimize financial risk in a divorce, planning ahead is key. Here are some legally sound strategies:
1. Sign a Prenuptial Agreement (Prenup)
A prenup is the most effective way to protect assets before marriage. It allows couples to:
- Define which assets remain separate
- Outline how property will be divided in case of divorce
- Protect businesses and future inheritances
Requirements for a Valid Prenup in Yukon:
- Must be in writing and signed by both parties
- Full financial disclosure is required
- Each party should have independent legal advice
2. Consider a Postnuptial Agreement
If you’re already married, a postnuptial agreement can serve a similar purpose. Courts scrutinize these more closely, so both spouses must enter the agreement willingly and with legal counsel.
3. Keep Inheritances and Gifts Separate
If you receive an inheritance or a large gift, keep it in a separate bank account under your name only. Avoid using these funds for joint expenses (e.g., mortgage payments, renovations), as this could convert them into family property.
4. Avoid Commingling Assets
Mixing personal and marital funds can weaken your claim to separate property. Best practices include:
- Maintaining separate bank accounts
- Not adding your spouse’s name to property titles unless necessary
- Keeping clear records of pre-marriage assets
5. Establish a Trust (For High-Value Assets)
If you have substantial wealth, a trust can be an effective tool. By transferring assets into an irrevocable trust, you legally separate them from marital property. However, setting up a trust solely to hide assets from divorce is considered fraudulent, so consult a lawyer.
6. Protect Business Interests
If you own a business:
- Keep business finances separate from personal accounts
- Consider a shareholder agreement that outlines what happens to the business in a divorce
- Document any pre-marriage business value separately
7. Update Your Will and Beneficiary Designations
Divorce does not automatically remove an ex-spouse as a beneficiary on life insurance, pensions, or RRSPs. After separation, update all beneficiary designations to reflect your current wishes.
What If Divorce Is Already Imminent?
If divorce proceedings have started, you still have options to protect your financial interests:
1. Negotiate a Fair Settlement
Litigation is expensive and unpredictable. A negotiated settlement (through mediation or collaborative law) often leads to better outcomes.
2. Document Everything
Gather financial records, including:
- Bank statements
- Tax returns
- Property deeds and loan documents
- Proof of pre-marriage assets
3. Avoid Hiding Assets
Concealing assets during divorce is illegal and can result in severe penalties, including an unfavorable property division. Transparency is crucial.
4. Seek Legal Advice Immediately
A Yukon family lawyer can help you:
- Understand your rights
- Identify exempt property
- Negotiate a fair division
Common Mistakes to Avoid
- Assuming All Assets Are Protected – Even if you owned property before marriage, its increase in value could be divisible.
- Ignoring Tax Implications – Transferring assets may trigger capital gains taxes.
- Making Verbal Agreements – Always get financial agreements in writing.
- Waiting Too Long to Act – The sooner you plan, the more options you have.
Final Thoughts
Divorce doesn’t have to mean financial ruin. By taking proactive steps—such as signing a prenup, keeping inheritances separate, and seeking legal advice—you can protect your assets while complying with Yukon’s laws.
If you’re concerned about property division, consulting a Yukon family lawyer should be your next step. Every situation is unique, and personalized legal guidance ensures the best possible outcome.
Did you find this guide helpful? Share your thoughts in the comments or reach out for a consultation with a legal expert today!
