Everyone always asks: what is common law in Alberta? The answer is not simple, but here is my attempt at simplification. Also, I have to add a warning that you really need to check with a lawyer about this. My list is only intended to alert you to issues. This stuff can date quickly - do not rely upon it without making sure it is current. And, the devil is in the details, sometimes one more piece of information about your situation would change the result. Do not try to use this to be your own lawyer.
Child support -- same as if married in Alberta with a minor exception for 18+ aged childen;
Custody -- priniciples are roughly the same, but the language, terminology and forms differ;
Spousal support -- not entirely the same. To succeed, at a minimum, there must be a child born to the relationship, or if there is no child, then the parties must have lived together for 3 years. If these critia are not met, your application will be rejected. So, for anyone cohabiting, you should consider getting a legal opinion if you have children or expect to live together for more than 3 years. Once these threshold are met, the tests for how much spousal support and for how long are somewhat similar to the laws which apply to people who are married.
Property -- Very different for common law people than married. This is somewhat difficult to explain briefly and on some points lawyers will differ. This is really not something to rely upon the internet for, so read with caution.
First, there is no statue or piece of law that governs the division of common law property in Alberta. So, the only way to know the law is to read a series of cases in which the law developed. Second, the cases usually address property in one parties' name. I will address property in joint names below.
Where property is in one parties' name (the 'owner'), the caselaw recommends that if the non-owner party can show that the owner acquired property or benefitted from an increase in value to existing property as a result of the actions of non-owner, and the non-owner suffered a detriment to enable that acquisition or increase, than the owner would be unjustly enriched if he/she walked away from the relationship without sharing something to the non-owner. In such a case, the law will impose a 'constructive trust' meaning that they will notionally construct the concept that the owner holds some of that increased value for the non-owner.
For example,
a.if an owner/common law partner has a house in poor repair worth $100,000 at the commencement of the relationship;
b. and if the non-owner spent time, money and labour improving the house during the relationship;
c. and the non-owner could have spent the time, money and labour elsewhere, thus creating a detriment to the non-owner;
d. and the non-owner's money and labour increased the value of the house, to say $150,000;
e. then the law finds that the owner will have been unjustly enriched unless the non-owner receives a share of the increase of $50,000.
f. the extent of the enrichment is usually calculated by excluding the starting value or $100,000 in the example
g. the parties must then determine what portion of the increase of $50,000 the partner should receive. If the relationship and contribution are minimal, the share is minimal. If the relationship and contribution is substantial, the share could be as much as 50%.
The legal test is usually stated as follows: The owner has been unjustly enriched by the non-owner if the non-owner has conferred a benefit to the owner, suffered a detriment and there is no reason in law why a remedy should not ensue.
An interesting question arises: does this apply to all assets of the relationship or is it an asset by asset analysis. For example, can a non-owner partner show that there has been a benefit provided and a detriment has been suffered in the acquisition of the owner's RRSP, or pension or other assets which the non-owner had little direct imput.
As stated above, I should comment on joint assets. There is a rebuttable presumption in law that when parties put assets in joint names, they intend to divide them jointly. It is a 'rebuttable' presumption, meaning that this will not always occur and it is open for debate in every case whether that presumption should apply. It is usually simple if parties acquire a joint asset with equal contributions and pay for it equally. It becomes tricky if the contributions are not equal. For example, if the parties contribute on a 90/10 ratio, do any profits get divided equally or on the same 90/10 ratio. This is open for discussion and there is no fixed answer.
There are some other features to this test. The takeaway is twofold: one that it is not the same for married people and common law people. And secondly, that this area of law is not codefied and therefore open to interpretation and confusion.
I would recommend speaking to a lawyer on this point before living with someone. Failure to do so is like driving down a road with no street signs -- you will not know when to stop, the speed limit or what to do when you meet up with another car at an intersection. Also, there are some strategies that can be put in place to maximize your position, should the relationship fail.
I also recommend speaking to a lawyer if the relationship fails. Again, there may be some useful strategies that you can implement to your benefit.
Sunday, April 25, 2010
Saturday, March 27, 2010
Child Support - Calculation
The Federal Child Support Guidelines (the "Guidelines") list 4 objectives. One is to simplify the calculation of child support. In the majority of cases this is achieved by the Guidelines. So, I'll start by telling you how you would calculate child support in a simple case.
First, you need to know about 12 pieces of information (some simple, some not so simple):
1. Number of children (simple usually);
2. If any of the children are over 18 and still in school (not always simple)
3.The custody/parenting arrangement (definitely not always simple);
4. Which Province the payor parent r esides in (probably simple);
5. The father's income (not always simple, the Guidelines have 3 pages to help with this);
6. The mother's income (not always simple);
7. The after-tax cost of child care for employment or schooling (takes a bit of investigation);
8. Health care -- the child's portion of health insurance (usually simple);
9. Health care -- the uninsured health expenses -- might be ortho, extra dental charges, etc. (simple?)
10. Extraordinary school expenses (simple?)
11. Extraordinary extracurricular expenses (simple?)
12. Post Secondary expenses (simple?)
If you and the other parent can find a way to make this simple and are able to put the above listed information together, you are off to the races and child support will be simple to calculate. For the rest of parents who cannot agree on the above 12 items, things get complicated in a hurry. I can advise that I have dealt with complication to each and every item listed.
Back to the simple example, if the parties agree the variables are as follows:
1. There are 2 children;
2. None over 18;
3. Custody is with the mother and the father has access;
4. The father/payor lives in Alberta;
5. The father/payor earns a gross income of $75,000 a year working for the government;
6. The mother earns a gross income of $25,000 a year working for a store;
7-12. The parties agree that the after tax daycare cost is $500 per month and there are swimming, soccer and music lessons during different times of the year, which cost an average of $100 per month.
The determine child support using the above listed factors, now there are 2 more steps:
First, the base child support is determined using the Guideline tables for the Province in which the payor lives, the number of children and the payor parent's gross annual income. This is a link for the Alberta tables. http://www.justice.gc.ca/eng/pi/fcy-fea/lib-bib/legis/fcsg-lfpae/index.html#ab
The link shows that payors in Alberta earning $75,000 gross per year who have two children must pay $1082 in child support every month. This payment is after tax for the payor and the recipient receives it tax free.
The second step is to determine the sharing of the Section 7 expenses. In this case, the Section 7s cost $600 per month -- $500 for net daycare and $100 for extracurriculars.
These expenses are paid in proportion to the parties' incomes. In this case, the Husband earns $75,000 and the Wife earns $25,000. The family total is $100,000. The Husband must pay $75,000 divided by the family total of $100,000 or 75% of the Section 7s. 75% of $600 is $450.
Summary: The Husband pays a base amount of $1082 + $450 in Section 7s.
Simple right?? The Legislators and the Courts think it is sufficiently simple that they expect it to be paid. And even if it is not simple, they expect you to figure it out, by agreeing, using lawyers, using government services to help you and reading up on this on government websites. From personal experience I can advise that it is probably about 80% simple and straightforward.
As I always suggest: speak to a lawyer about this. There are a lot of exceptions and other rules to the Guidelines that could increase or reduce your support. You need to be aware of these because child support can be changed every year, or with changes to incomes or with self-employment income or changes to custody and parenting or Section 7 expenses or a host of other factors. As they say 'the devil is in the detail' and there are a lot of details which can come into play. Get a lawyer to tell you how it works and to warn you of things that could happen if circumstances change.
First, you need to know about 12 pieces of information (some simple, some not so simple):
1. Number of children (simple usually);
2. If any of the children are over 18 and still in school (not always simple)
3.The custody/parenting arrangement (definitely not always simple);
4. Which Province the payor parent r esides in (probably simple);
5. The father's income (not always simple, the Guidelines have 3 pages to help with this);
6. The mother's income (not always simple);
7. The after-tax cost of child care for employment or schooling (takes a bit of investigation);
8. Health care -- the child's portion of health insurance (usually simple);
9. Health care -- the uninsured health expenses -- might be ortho, extra dental charges, etc. (simple?)
10. Extraordinary school expenses (simple?)
11. Extraordinary extracurricular expenses (simple?)
12. Post Secondary expenses (simple?)
If you and the other parent can find a way to make this simple and are able to put the above listed information together, you are off to the races and child support will be simple to calculate. For the rest of parents who cannot agree on the above 12 items, things get complicated in a hurry. I can advise that I have dealt with complication to each and every item listed.
Back to the simple example, if the parties agree the variables are as follows:
1. There are 2 children;
2. None over 18;
3. Custody is with the mother and the father has access;
4. The father/payor lives in Alberta;
5. The father/payor earns a gross income of $75,000 a year working for the government;
6. The mother earns a gross income of $25,000 a year working for a store;
7-12. The parties agree that the after tax daycare cost is $500 per month and there are swimming, soccer and music lessons during different times of the year, which cost an average of $100 per month.
The determine child support using the above listed factors, now there are 2 more steps:
First, the base child support is determined using the Guideline tables for the Province in which the payor lives, the number of children and the payor parent's gross annual income. This is a link for the Alberta tables. http://www.justice.gc.ca/eng/pi/fcy-fea/lib-bib/legis/fcsg-lfpae/index.html#ab
The link shows that payors in Alberta earning $75,000 gross per year who have two children must pay $1082 in child support every month. This payment is after tax for the payor and the recipient receives it tax free.
The second step is to determine the sharing of the Section 7 expenses. In this case, the Section 7s cost $600 per month -- $500 for net daycare and $100 for extracurriculars.
These expenses are paid in proportion to the parties' incomes. In this case, the Husband earns $75,000 and the Wife earns $25,000. The family total is $100,000. The Husband must pay $75,000 divided by the family total of $100,000 or 75% of the Section 7s. 75% of $600 is $450.
Summary: The Husband pays a base amount of $1082 + $450 in Section 7s.
Simple right?? The Legislators and the Courts think it is sufficiently simple that they expect it to be paid. And even if it is not simple, they expect you to figure it out, by agreeing, using lawyers, using government services to help you and reading up on this on government websites. From personal experience I can advise that it is probably about 80% simple and straightforward.
As I always suggest: speak to a lawyer about this. There are a lot of exceptions and other rules to the Guidelines that could increase or reduce your support. You need to be aware of these because child support can be changed every year, or with changes to incomes or with self-employment income or changes to custody and parenting or Section 7 expenses or a host of other factors. As they say 'the devil is in the detail' and there are a lot of details which can come into play. Get a lawyer to tell you how it works and to warn you of things that could happen if circumstances change.
Saturday, March 6, 2010
Pre-Nupt Top 10 Myths Busted
These are 'busted myths', in other words although people tend to think that the statements below are true, 9 times out of 10, these myths are wrong:
Myth 1 -- A cookie cutter, "standard" pre-nupt exists;
Myth 2 -- The parties can hire one lawyer;
Myth 3 -- You don't need lawyers at all;
Myth 4 -- You can get a good pre-nupt without providing details of your assets;
Myth 5 -- As long as it is signed it is good;
Myth 6 -- It won't cost a lot of money;
Myth 7 -- It will be easy;
Myth 8 -- It's ok to leave it until 2 weeks before the wedding;
Myth 9 -- Once you sign it, you can forget about it;
Myth 10 -- You can ask your fiance to sign off major rights and it won't impact the relationship.
This is a very tricky, technical area. Make sure you get really good legal advice.
Myth 1 -- A cookie cutter, "standard" pre-nupt exists;
Myth 2 -- The parties can hire one lawyer;
Myth 3 -- You don't need lawyers at all;
Myth 4 -- You can get a good pre-nupt without providing details of your assets;
Myth 5 -- As long as it is signed it is good;
Myth 6 -- It won't cost a lot of money;
Myth 7 -- It will be easy;
Myth 8 -- It's ok to leave it until 2 weeks before the wedding;
Myth 9 -- Once you sign it, you can forget about it;
Myth 10 -- You can ask your fiance to sign off major rights and it won't impact the relationship.
This is a very tricky, technical area. Make sure you get really good legal advice.
Friday, March 5, 2010
Child Support Enforcement How and Why
Why to Enforce
Once you have a child support order, you should enforce it. This might sound obvious, but there are some people who do not. I'm not sure why: perhaps the recipient knows that the payor parent is in a bad financial situation, perhaps they have some arrangement to the contrary, perhaps the kids have switched homes, perhaps there is a threat of abuse, etc. Whatever the reason, enabling non-payment or under-payment is ultimately problematic in the long run.
In my practice, I meet with both the people who have failed to enforce or update child support orders and the people who have failed to pay.
The ones who have failed to collect or to collect the right amount over the years, are told that if the payor's income has increased, the law allows them to apply to vary the ongoing child support and to receive the difference between what has been paid in previous years and what should have been paid (we call that a retroactive adjustment).
For everyone lucky enough to hear that they might be able to receive this helpful adjustment/windfall, someone else is about to learn that they suddenly owe a back debt of child support. And sometimes these debts can be substantial. So enforcement and regular adjustments simplify everything and avoid accumulated arrears/retroactive debt. Most people, particularly with the benefit of hindsight, would have found a small adjustment to have been easier then a massive adjusting payment years later. For this reason, early enforcement is best.
I can advise from experience that retroactive applications can be costly to both parties. While at first blush, it may seem like a simple task to calculate the support retroactively, it can be quite difficult to gather the evidence and work out the calculation. This becomes particularly complex when a lot of time has passed, when the payor is self-employed, when the situation is complicated, and when the payor resists (which is often). Additionally, there are some defences to retroactive applications which should be anticipated and addressed when preparing to apply for retroactive child support. These applications contain risk to both parties, which is costly in terms of mounting the best application, as well as in anxiety and stress. So, again, early enforcement and regular updates are best. Or, if it is not possible to expect the payor to pay for legitimate reasons, then the child support order should be varied to a lower amount and enforced (courts rarely waive unpaid child support.)
How to Enforce
Once you have a child support order in place, you can take steps to enforce payment. The easiest way to seek enforcement is to register your child support order with the Alberta Maintenance Enforcement Program. MEP has the power to garnishee wages, to cancel the payor's driver's licence, to impose interest and penalties, to garnishee tax refunds and to prevent a person from obtaining a fishing or hunting licence. In rare circumstances, the power can extend to more serious penalties such as jail time. Anyone registering with MEP is invited to report any outstanding payments so that MEP can enforce those amounts plus the ongoing payments. Overall MEP can put a lot of pressure on a person to pay their child support. Most people end up wishing they had just paid in the first place, particularly when substantial arrears are involved.
The law has become increasingly clear with respect to the need to pay the correct amount based on current earnings, even if a court order or agreement is in place to pay a lesser amount. In order to help recipient parents receive the correct amount of support, the Alberta government started the Maintenance Recalculation Program in January 2010. This is designed to adjust child support annually for those cases in which annually income can be determined fairly easily (i.e. for employees, but probably not for business owners).
It is generally best to take steps to increase support annually. If payors fail to increase payments, they risk owing the accumulated difference between what is being paid and what should have been paid. For those who receive child support, they should be vigilant in seeking updated financial disclosure and ensuring that child support is updated annually (this may include registering for the recalculation program.)
Once you have a child support order, you should enforce it. This might sound obvious, but there are some people who do not. I'm not sure why: perhaps the recipient knows that the payor parent is in a bad financial situation, perhaps they have some arrangement to the contrary, perhaps the kids have switched homes, perhaps there is a threat of abuse, etc. Whatever the reason, enabling non-payment or under-payment is ultimately problematic in the long run.
In my practice, I meet with both the people who have failed to enforce or update child support orders and the people who have failed to pay.
The ones who have failed to collect or to collect the right amount over the years, are told that if the payor's income has increased, the law allows them to apply to vary the ongoing child support and to receive the difference between what has been paid in previous years and what should have been paid (we call that a retroactive adjustment).
For everyone lucky enough to hear that they might be able to receive this helpful adjustment/windfall, someone else is about to learn that they suddenly owe a back debt of child support. And sometimes these debts can be substantial. So enforcement and regular adjustments simplify everything and avoid accumulated arrears/retroactive debt. Most people, particularly with the benefit of hindsight, would have found a small adjustment to have been easier then a massive adjusting payment years later. For this reason, early enforcement is best.
I can advise from experience that retroactive applications can be costly to both parties. While at first blush, it may seem like a simple task to calculate the support retroactively, it can be quite difficult to gather the evidence and work out the calculation. This becomes particularly complex when a lot of time has passed, when the payor is self-employed, when the situation is complicated, and when the payor resists (which is often). Additionally, there are some defences to retroactive applications which should be anticipated and addressed when preparing to apply for retroactive child support. These applications contain risk to both parties, which is costly in terms of mounting the best application, as well as in anxiety and stress. So, again, early enforcement and regular updates are best. Or, if it is not possible to expect the payor to pay for legitimate reasons, then the child support order should be varied to a lower amount and enforced (courts rarely waive unpaid child support.)
How to Enforce
Once you have a child support order in place, you can take steps to enforce payment. The easiest way to seek enforcement is to register your child support order with the Alberta Maintenance Enforcement Program. MEP has the power to garnishee wages, to cancel the payor's driver's licence, to impose interest and penalties, to garnishee tax refunds and to prevent a person from obtaining a fishing or hunting licence. In rare circumstances, the power can extend to more serious penalties such as jail time. Anyone registering with MEP is invited to report any outstanding payments so that MEP can enforce those amounts plus the ongoing payments. Overall MEP can put a lot of pressure on a person to pay their child support. Most people end up wishing they had just paid in the first place, particularly when substantial arrears are involved.
The law has become increasingly clear with respect to the need to pay the correct amount based on current earnings, even if a court order or agreement is in place to pay a lesser amount. In order to help recipient parents receive the correct amount of support, the Alberta government started the Maintenance Recalculation Program in January 2010. This is designed to adjust child support annually for those cases in which annually income can be determined fairly easily (i.e. for employees, but probably not for business owners).
It is generally best to take steps to increase support annually. If payors fail to increase payments, they risk owing the accumulated difference between what is being paid and what should have been paid. For those who receive child support, they should be vigilant in seeking updated financial disclosure and ensuring that child support is updated annually (this may include registering for the recalculation program.)
Friday, February 26, 2010
TIP: Custody = Best Interests of the Child
Canadian legislation mandates a Court to consider 'what is in the best interest' of a child when making a decision about custody, access and many other issues related to parenting children.
In other words, the Court is to put aside considerations of what a parent wants, what would be convenient to the parent, a parent's sense of entitlement, allegations that one parent is of poor character etc. Instead, the Court must try to look at the world through the eyes of the child in question and determine from that child centred perspective what is best for that child.
Although the legislation does not have a sublist of factors for a court to consider, certain key concepts arise, for example:
- the need for maximum contact between the child and both parents, provided that is considered best for the child;
- stability of routine is important;
- the pattern of parenting during and post-separation is highly relevant;
- maintaining bonds between a child and each parent consistent with what the child is used to;
- the wishes of the child, although this can be limited to older children.
The Court is directed to avoid considering matters of conduct in this analysis. In other words, if a child lives with one parent, is stable and bonded to a parent, that is far more relevant to the court than the fact that one parent thinks the other parent is bad, a cheater, a liar, etc.
It is often hard for a parent to accept the fact that, although the other parent may be highly flawed from an adult perspective, or the former spouse's perspective, if the evidence shows that it is best for the child to be with that parent, the court will overlook the flaws.
For parents who do want scrutiny of all factors, more in depth custody analysis may be available, but this tends to be the more complicated, more expensive, more time consuming and intrusive route. Also, this commentary is intended to give a general comment on custody and may not apply to all situation: there are always exceptions.
Obtaining legal advice prior to or as quickly as possible after separation is critical because of the fact that patterns of parenting post-separation are highly relevant.
In other words, the Court is to put aside considerations of what a parent wants, what would be convenient to the parent, a parent's sense of entitlement, allegations that one parent is of poor character etc. Instead, the Court must try to look at the world through the eyes of the child in question and determine from that child centred perspective what is best for that child.
Although the legislation does not have a sublist of factors for a court to consider, certain key concepts arise, for example:
- the need for maximum contact between the child and both parents, provided that is considered best for the child;
- stability of routine is important;
- the pattern of parenting during and post-separation is highly relevant;
- maintaining bonds between a child and each parent consistent with what the child is used to;
- the wishes of the child, although this can be limited to older children.
The Court is directed to avoid considering matters of conduct in this analysis. In other words, if a child lives with one parent, is stable and bonded to a parent, that is far more relevant to the court than the fact that one parent thinks the other parent is bad, a cheater, a liar, etc.
It is often hard for a parent to accept the fact that, although the other parent may be highly flawed from an adult perspective, or the former spouse's perspective, if the evidence shows that it is best for the child to be with that parent, the court will overlook the flaws.
For parents who do want scrutiny of all factors, more in depth custody analysis may be available, but this tends to be the more complicated, more expensive, more time consuming and intrusive route. Also, this commentary is intended to give a general comment on custody and may not apply to all situation: there are always exceptions.
Obtaining legal advice prior to or as quickly as possible after separation is critical because of the fact that patterns of parenting post-separation are highly relevant.
Thursday, February 11, 2010
Child Support - General
Most people have some awareness that the parent who cares for a child should receive child support from the other parent.
The thing that not everyone knows is that it is really dangerous to guess what the amount should be. Our legislators have set out rules for how to calculate support that fluctuates from person to person based on the amount of income earned and some other factors. So, the amount that a friend is paying/receiving, is likely very different from what you should pay/receive.
Here is the cusp of it -- the law has been interpreted in many, many cases to say that your child has the right to receive child support in the amount set out in the Federal Child Support Guidelines (FCSG) both retroactively and on an ongoing basis. So, if you do not know what the FCSG is, or if the amount that you are paying/receiving is more or less than the FCSG amount, you need to find out.
The consequence of failure to get this right is that a court could order you to pay a large back payment, should it be determined at a later date that you have underpaid. And, for the majority of people, it is far easier to pay the right amount today, than to be hit with a huge liability down the road (a stitch in time saves 9).
To avoid the possibility of a looming and increasing debt arising from a shortfall of child support, find out how to calculate child support under the FCSG, get the amount in a court order and pay it. Also, you need to adjust your payment every year to match your income variations.
Trying to work out child support any other way can lead to big, expensive problems. And for those on the receiving end of too little, it is best for you, your child and the payor to get it right today.
With respect to how to get a child support order, I'm not entirely sure of all of the routes people take to get child support. In my office, I help people who are going through a divorce and people with children out of wedlock. I do the paperwork and take the steps to get child support for my clients. I help gather the information to determine what should be paid.
I think that the 3 other main routes people take to get child support are to figure it out and ask for voluntary payments, to apply to court as a self-represented party, or to have the matter addressed when social assistance is being received. For those who represent themselves, forms and some assistance from trained personnel is available. If you take any of these 3 routes, please take as many steps as you can to get the amount correct. Avoid a headache down the road.
The thing that not everyone knows is that it is really dangerous to guess what the amount should be. Our legislators have set out rules for how to calculate support that fluctuates from person to person based on the amount of income earned and some other factors. So, the amount that a friend is paying/receiving, is likely very different from what you should pay/receive.
Here is the cusp of it -- the law has been interpreted in many, many cases to say that your child has the right to receive child support in the amount set out in the Federal Child Support Guidelines (FCSG) both retroactively and on an ongoing basis. So, if you do not know what the FCSG is, or if the amount that you are paying/receiving is more or less than the FCSG amount, you need to find out.
The consequence of failure to get this right is that a court could order you to pay a large back payment, should it be determined at a later date that you have underpaid. And, for the majority of people, it is far easier to pay the right amount today, than to be hit with a huge liability down the road (a stitch in time saves 9).
To avoid the possibility of a looming and increasing debt arising from a shortfall of child support, find out how to calculate child support under the FCSG, get the amount in a court order and pay it. Also, you need to adjust your payment every year to match your income variations.
Trying to work out child support any other way can lead to big, expensive problems. And for those on the receiving end of too little, it is best for you, your child and the payor to get it right today.
With respect to how to get a child support order, I'm not entirely sure of all of the routes people take to get child support. In my office, I help people who are going through a divorce and people with children out of wedlock. I do the paperwork and take the steps to get child support for my clients. I help gather the information to determine what should be paid.
I think that the 3 other main routes people take to get child support are to figure it out and ask for voluntary payments, to apply to court as a self-represented party, or to have the matter addressed when social assistance is being received. For those who represent themselves, forms and some assistance from trained personnel is available. If you take any of these 3 routes, please take as many steps as you can to get the amount correct. Avoid a headache down the road.
Monday, February 8, 2010
Tip: Cheating is almost never relevant to custody
I am always amazed at the degree of relief some women experience when I tell them that they will not lose custody of their children, simply because they had an affair or someone has accused them of having had an affair. While I'm sure that there are places in the world that seek to punish marital transgressions, Canada is not such a place. And, for the people who are suffering from the pain caused by this behaviour, I am sorry to tell you that our judges are not paid to act as your family's personal morality judge or to publicly denounce whatever act has occurred.
The Federal legislators who wrote the law related to custody and access to children, child support and spousal support in divorcing couples decided that the mere fact that there has been adultery or other matters of conduct should not be determinitive of these issues. For example, proof that a mother had an affair does not mean she will lose custody of her child and proof that a father cheated does not mean he will have to pay spousal support.
Cheating is only relevant if you can link something about the cheating to another issue. For example, when a court weighs evidence to determine who should be granted custody of a child, the fact that one parent had an affair, should not form a material part of the evidence. But, if a parent in a custody battle had an affair and has continued to live with a person who could be dangerous to the children (for example if the new partner had a history of violence to children, or serious drug or alcohol problems), the court may have to consider this factor in order to ensure that the children are protected. So, again, the court will not focus on the fact that there is a relationship with the new partner, but they might consider any safety matters arising as a result of the relationship.
A few years ago, a woman successfully presented a case to the Supreme Court of Canada in which she argued that her husband's affair placed her in need of spousal support. This was an unusual case in which she was able to show that the affair caused her such a degree of grief that she was not able to work. So, again, the spousal support was not granted because of the affair, but because the affair triggered a wife to suffer from a serious and debilitating depression. This was an unusual case.
One could ask if some of our judges could be influenced on an emotional level if evidence of conduct is included in submissions. Legal advice should be sought on this point. Afterall, our judges are able to hear that an accused has pleaded guilty and still find that accused to be innocent on strict application of the law.
I wanted to write about this point because I have seen good people on the brink of making really bad decisions about parenting due to their guilt, or their feeling of powerlessness in the face of accusations, even if they are not true. Please seek legal advice when the parenting of children is at stake -- as I have stated in previous posts, you cannot guess what the law is. It changes over time and from place to place. So, it is not necessarily what you see on t.v. or what your friends or community leaders tell you. It is not what makes good fiction. It is what it is and cheating is rarely relevant.
.
The Federal legislators who wrote the law related to custody and access to children, child support and spousal support in divorcing couples decided that the mere fact that there has been adultery or other matters of conduct should not be determinitive of these issues. For example, proof that a mother had an affair does not mean she will lose custody of her child and proof that a father cheated does not mean he will have to pay spousal support.
Cheating is only relevant if you can link something about the cheating to another issue. For example, when a court weighs evidence to determine who should be granted custody of a child, the fact that one parent had an affair, should not form a material part of the evidence. But, if a parent in a custody battle had an affair and has continued to live with a person who could be dangerous to the children (for example if the new partner had a history of violence to children, or serious drug or alcohol problems), the court may have to consider this factor in order to ensure that the children are protected. So, again, the court will not focus on the fact that there is a relationship with the new partner, but they might consider any safety matters arising as a result of the relationship.
A few years ago, a woman successfully presented a case to the Supreme Court of Canada in which she argued that her husband's affair placed her in need of spousal support. This was an unusual case in which she was able to show that the affair caused her such a degree of grief that she was not able to work. So, again, the spousal support was not granted because of the affair, but because the affair triggered a wife to suffer from a serious and debilitating depression. This was an unusual case.
One could ask if some of our judges could be influenced on an emotional level if evidence of conduct is included in submissions. Legal advice should be sought on this point. Afterall, our judges are able to hear that an accused has pleaded guilty and still find that accused to be innocent on strict application of the law.
I wanted to write about this point because I have seen good people on the brink of making really bad decisions about parenting due to their guilt, or their feeling of powerlessness in the face of accusations, even if they are not true. Please seek legal advice when the parenting of children is at stake -- as I have stated in previous posts, you cannot guess what the law is. It changes over time and from place to place. So, it is not necessarily what you see on t.v. or what your friends or community leaders tell you. It is not what makes good fiction. It is what it is and cheating is rarely relevant.
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Saturday, February 6, 2010
Tip: Joint title has financial implications
People have a tendency to put the title to their house in JOINT names with their spouse or common law partner, without understanding the legal implications (this arrangement is called a JOINT TENANCY). I don't really know why people do this because there is another option called TENANTS IN COMMON. (I know that we think of a 'tenant' as a renter, but these are the correct terms for the two most common ways in which houses are owned by more than one person in Alberta).
Owning property as TENANTS IN COMMON is underused and most people have not heard of it. TENANTS IN COMMON must specify the percentage of ownership each owner has: 50/50, 27/75 or even 1/99. If the property is sold or one owner dies and the estate needs a payment, the value is divided as per the percentage of ownership. Simple and clear.
The rules are much murkier for JOINT TENANTS. Here is a quick overview which is intended to alert you to the issues and not to make you a lawyer:
1. 'The survivor takes all' in a joint tenancy. If one joint tenant dies, the other joint tenant gets 100% of the house.
2. If you are married, the Matrimonial Property Act (MPA) applies a 'presumption of advancement' to exempt money put into an asset owned as JOINT TENANTS. This is hard to explain, because to understand this point, you need to know that some categories of property under the MPA are exempt from division between spouses. The 'presumption of advancement' means that if a husband/wife puts exempt money into a house owned as JOINT TENANTS, 25% of the exempt property will have to be shared with the other spouse if they separate. In contrast, if that exempt money were put into a house in one party's sole name or in a house owned as TENANTS IN COMMON, this presumption would not operate. The 'presumption of advancement' presumes that when you put your exempt money into something owned JOINTLY that you intended to share a portion of that money. Example, wife deposits $60,000 of her pre-marital savings towards the purchase of a $200,000 house. She puts the husband on title as a JOINT TENANT. They separate later. The law 'presumes' she intented to 'advance' 25% of the deposit to her Husband when she put the title into JOINT names. This presumption can be successfully challenged if you can show that you explicitly agreed to waive it.
3. If you are common law, the Law of Property Act (LPA) governs. It is not very helpful. The LPA does NOT say that joint means a presumption of equal division. It says that if you and the other owner cannot agree on the division of your JOINTLY owned property, you can apply to court to have the division determined. And, if you actually applied to court for such a division, a complicated trust law analysis should be applied to determine each party's share of ownership upon a separation. That trust law analysis goes something like this:
a. there is no presumption of advancement against the deposit;
b. there is an argument for a RESULTING TRUST. Under a Resulting Trust, it is presumed to be unlikely that an unmarried person would intend to give their deposit and the house they bought with the deposit in whole or in part to the other JOINT TENANT, accordingly the other joint tenant has the onus of showing that there was an intention to gift a share of the deposit. Example: boyfriend puts the entire deposit of $60,000 into buying a $200,000 house and puts girlfriend on title as a JOINT TENANT. House increases in value to $220,000 and the parties split up. Girlfriend says joint means equal and wants half. Boyfriend says 'no' I put you on title because I needed another name to get a mortgage, I never intended that you would actually own half. A technical application of the law would say that the girlfriend has to provide evidence to show that the boyfriend actually intended to give her half of the value of the house and his deposit; or
c. There is an argument for a CONSTRUCTIVE TRUST, in which the girlfriend can argue that the boyfriend must give her a share of the value, otherwise he will be unjustly enriched by her other monetary contributions, labour or a combination of money and labour, notwithstanding no initial contribution.
I cannot make this less complicated -- it really is messy and complicated. My primary goal is to alert you to the fact that 'JOINT TENANCY' has a deviously complex meaning and advice should be sought before you sign off on this arrangement.
To help you issue spot, consider the following:
a. If you are married and deposit different amounts to the purchase of a house and then call it joint, you risk not getting 100% of your share of the deposit returned;
b. If you are not married and deposit different amounts to the purchase of a house in joint tenants, it is not clear how the deposit or the increase in value will be divided;
c. In both cases, selling the property will require consent from the other owner;
d. Joint causes confusing because it sounds like it means equal;
e.It leads to a right of survivorship on death;
f. It complicates things and may tie up your assets long after the relationship ends.
I am trying to be careful to point out legal issues in this blog and not to give legal advice (that would be dangerous and could run afowl of my 'always get legal advice' tip.)
The point here is that joint title carries different implications depending on whether you are married, not married or on death. Ask a lawyer to explain further and then find a way to own your property that best suits your situation.
Owning property as TENANTS IN COMMON is underused and most people have not heard of it. TENANTS IN COMMON must specify the percentage of ownership each owner has: 50/50, 27/75 or even 1/99. If the property is sold or one owner dies and the estate needs a payment, the value is divided as per the percentage of ownership. Simple and clear.
The rules are much murkier for JOINT TENANTS. Here is a quick overview which is intended to alert you to the issues and not to make you a lawyer:
1. 'The survivor takes all' in a joint tenancy. If one joint tenant dies, the other joint tenant gets 100% of the house.
2. If you are married, the Matrimonial Property Act (MPA) applies a 'presumption of advancement' to exempt money put into an asset owned as JOINT TENANTS. This is hard to explain, because to understand this point, you need to know that some categories of property under the MPA are exempt from division between spouses. The 'presumption of advancement' means that if a husband/wife puts exempt money into a house owned as JOINT TENANTS, 25% of the exempt property will have to be shared with the other spouse if they separate. In contrast, if that exempt money were put into a house in one party's sole name or in a house owned as TENANTS IN COMMON, this presumption would not operate. The 'presumption of advancement' presumes that when you put your exempt money into something owned JOINTLY that you intended to share a portion of that money. Example, wife deposits $60,000 of her pre-marital savings towards the purchase of a $200,000 house. She puts the husband on title as a JOINT TENANT. They separate later. The law 'presumes' she intented to 'advance' 25% of the deposit to her Husband when she put the title into JOINT names. This presumption can be successfully challenged if you can show that you explicitly agreed to waive it.
3. If you are common law, the Law of Property Act (LPA) governs. It is not very helpful. The LPA does NOT say that joint means a presumption of equal division. It says that if you and the other owner cannot agree on the division of your JOINTLY owned property, you can apply to court to have the division determined. And, if you actually applied to court for such a division, a complicated trust law analysis should be applied to determine each party's share of ownership upon a separation. That trust law analysis goes something like this:
a. there is no presumption of advancement against the deposit;
b. there is an argument for a RESULTING TRUST. Under a Resulting Trust, it is presumed to be unlikely that an unmarried person would intend to give their deposit and the house they bought with the deposit in whole or in part to the other JOINT TENANT, accordingly the other joint tenant has the onus of showing that there was an intention to gift a share of the deposit. Example: boyfriend puts the entire deposit of $60,000 into buying a $200,000 house and puts girlfriend on title as a JOINT TENANT. House increases in value to $220,000 and the parties split up. Girlfriend says joint means equal and wants half. Boyfriend says 'no' I put you on title because I needed another name to get a mortgage, I never intended that you would actually own half. A technical application of the law would say that the girlfriend has to provide evidence to show that the boyfriend actually intended to give her half of the value of the house and his deposit; or
c. There is an argument for a CONSTRUCTIVE TRUST, in which the girlfriend can argue that the boyfriend must give her a share of the value, otherwise he will be unjustly enriched by her other monetary contributions, labour or a combination of money and labour, notwithstanding no initial contribution.
I cannot make this less complicated -- it really is messy and complicated. My primary goal is to alert you to the fact that 'JOINT TENANCY' has a deviously complex meaning and advice should be sought before you sign off on this arrangement.
To help you issue spot, consider the following:
a. If you are married and deposit different amounts to the purchase of a house and then call it joint, you risk not getting 100% of your share of the deposit returned;
b. If you are not married and deposit different amounts to the purchase of a house in joint tenants, it is not clear how the deposit or the increase in value will be divided;
c. In both cases, selling the property will require consent from the other owner;
d. Joint causes confusing because it sounds like it means equal;
e.It leads to a right of survivorship on death;
f. It complicates things and may tie up your assets long after the relationship ends.
I am trying to be careful to point out legal issues in this blog and not to give legal advice (that would be dangerous and could run afowl of my 'always get legal advice' tip.)
The point here is that joint title carries different implications depending on whether you are married, not married or on death. Ask a lawyer to explain further and then find a way to own your property that best suits your situation.
Friday, January 29, 2010
TIP: Common Law is not the same as Married
Is common law the same in law as being married?
Before I can answer any question about common law relationships, I need to know: are we talking about dividing property, custody and parenting of children, child support, spousal support, income tax related issues, etc.
Most often, the questions from friends are directed at the rules for dividing property. The simple answer is that the law in Alberta for the division of common law property is not the same as the law for dividing marital property. In fact, in some cases, it is very, very different.
One could ask the conceptual question: how is it fair that married people acquire and divide their property under a different set of rules than common law couples. Indeed, why should walking down the aisle make that much difference. Also, if our Charter of Rights and Freedoms is intended to treat persons in similar circumstances similarly, then, shouldn't the rules be the same?
Our legislators and the Supreme Court of Canada have made a decision on this: the division of common law property in Alberta is not the same as the division of marital property. Our highest Court has held that people who actually go through the process of getting married have made a choice to be governed a certain way. The SCC found in the leading case on this subject that there is a fundamental difference between choosing to marry from choosing to live together unmarried. Consequently, the SCC held that the laws for dividing marital property can differ from the rules for dividing non-marital property without breaching any fundamental rights or freedoms.
Critics of the SCC ruling think that the decision ignores the fact that there are power imbalances in relationships and so not all parties to a relationship have necessarily made a 'choice' to be common law as opposed to married.
The point to take away is that the law is different if you are common law. Read on to find out how it differs. But, get legal advice on this point if you plan to live together or are separating.
Before I can answer any question about common law relationships, I need to know: are we talking about dividing property, custody and parenting of children, child support, spousal support, income tax related issues, etc.
Most often, the questions from friends are directed at the rules for dividing property. The simple answer is that the law in Alberta for the division of common law property is not the same as the law for dividing marital property. In fact, in some cases, it is very, very different.
One could ask the conceptual question: how is it fair that married people acquire and divide their property under a different set of rules than common law couples. Indeed, why should walking down the aisle make that much difference. Also, if our Charter of Rights and Freedoms is intended to treat persons in similar circumstances similarly, then, shouldn't the rules be the same?
Our legislators and the Supreme Court of Canada have made a decision on this: the division of common law property in Alberta is not the same as the division of marital property. Our highest Court has held that people who actually go through the process of getting married have made a choice to be governed a certain way. The SCC found in the leading case on this subject that there is a fundamental difference between choosing to marry from choosing to live together unmarried. Consequently, the SCC held that the laws for dividing marital property can differ from the rules for dividing non-marital property without breaching any fundamental rights or freedoms.
Critics of the SCC ruling think that the decision ignores the fact that there are power imbalances in relationships and so not all parties to a relationship have necessarily made a 'choice' to be common law as opposed to married.
The point to take away is that the law is different if you are common law. Read on to find out how it differs. But, get legal advice on this point if you plan to live together or are separating.
Thursday, January 28, 2010
TIP: Minimum requirement to divide property
The tip today is: marital property must be divided by a written agreement AND each spouse needs a lawyer to sign a Certificate to the agreement confirming that they have given independent legal advice (ILA). Under the law in Alberta you MUST have a written agreement and ILA or you will NOT satisfy the legislative requirements of Alberta for dividing property on a final basis. In other words BEWARE of non-legal services that divorce you and do not divide property or services which provide documents which state that you can divide property using a contract without a lawyer.
If you do not have a properly executed agreement with ILA, you may find out that you have not divided your property and that your spouse still has a claim for half of your assets. There are cases in which spouses have separated, moved on with their lives and started businesses only to find out years later that they must divide the value of their business with their former spouse, because they did not finalize the division of their property correctly. Issues can also arise with selling and financing property (banks like to see separation agreements.) Capital gains taxes may accrue which could have been avoided (CRA likes to see separation agreements.)
The other pitfall occurs if you get a Divorce without considering property division. A clock starts ticking after you are formally divorced which could bar you from applying to divide property after 2 years.
The POINT: Divide property with a written agreement with ILA, and ask questions if you are not sure.
If you do not have a properly executed agreement with ILA, you may find out that you have not divided your property and that your spouse still has a claim for half of your assets. There are cases in which spouses have separated, moved on with their lives and started businesses only to find out years later that they must divide the value of their business with their former spouse, because they did not finalize the division of their property correctly. Issues can also arise with selling and financing property (banks like to see separation agreements.) Capital gains taxes may accrue which could have been avoided (CRA likes to see separation agreements.)
The other pitfall occurs if you get a Divorce without considering property division. A clock starts ticking after you are formally divorced which could bar you from applying to divide property after 2 years.
The POINT: Divide property with a written agreement with ILA, and ask questions if you are not sure.
Wednesday, January 27, 2010
TIP: Always get legal advice
I just attended a presentation on social networking for women entrepreneurs and felt inspired to start a blog. My plan is to post tips for people in Calgary who want some general information about divorce, separating and dividing property that is correct. There is a lot of garbage and sometimes even completely incorrect information available on this topic. So, this is my first tip:
Buck up the money (probably $300 to $700) to have an initial consultation with a lawyer. You can still use other non-legal resources to keep your costs down after a consultation.
You need to do this because:
A. The law is not intuitive: if you try to guess what it is, you will miss things or you may be wrong;
B. The law changes -- things you read or advice from friends may be outdated;
C. The law is simply what our legislators have come up with and our judiciary has interpreted: so it may not resonate with experience or common sense -- it is what it is.
D. Every situation turns on its own facts -- you need someone to tell you how the law will be applied in your situation.
E. Getting divorced does not divide your property. This is separate. Failure to divide your property could leave this issue open to bite you later, or could bar you from dealing with it as a limitation period may expire. You need to know how this works.
The POINT: Get advice from a family law lawyer and get it early.
Buck up the money (probably $300 to $700) to have an initial consultation with a lawyer. You can still use other non-legal resources to keep your costs down after a consultation.
You need to do this because:
A. The law is not intuitive: if you try to guess what it is, you will miss things or you may be wrong;
B. The law changes -- things you read or advice from friends may be outdated;
C. The law is simply what our legislators have come up with and our judiciary has interpreted: so it may not resonate with experience or common sense -- it is what it is.
D. Every situation turns on its own facts -- you need someone to tell you how the law will be applied in your situation.
E. Getting divorced does not divide your property. This is separate. Failure to divide your property could leave this issue open to bite you later, or could bar you from dealing with it as a limitation period may expire. You need to know how this works.
The POINT: Get advice from a family law lawyer and get it early.
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