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Posts Tagged ‘BC family asset division’

BC Separation Law for Divorcing and Separating Common Law and Unmarried Spouses

Thursday, April 8th, 2010

Lorne MacLean Vancouver BC Family Lawyer


We as British Columbia family law and BC divorce lawyers as well as lawyers acting for unmarried couples are often asked to explain the differences in law that applies to divorcing as opposed to separating unmarried couples.

There are several differences between the legal rights of individuals separating from a marriage versus those that are separating from a Common Law relationship. In this article a very brief synopsis of some of the most significant differences will be highlighted. Please note that this should not to be considered as legal advice that is necessarily relevant to your own situation. Should you be considering a separation or are in the midst of a separation we urge you to seek legal advice as soon as possible.

In British Columbia you must cohabit 2 years in a marriage-like relationship before you are considered as being in a common law relationship. If the common law nature of a a relationship is disputed by one party, the Court will embark on a consideration of all factors regarding the relationship to establish whether it fits under this definition. The facts considered will include but not limited to the sexual involvement of the couple, their economic codependence, roles played by each party (ie. homemaker and breadwinner) and whether there are any children borne of the relationship.

1. Property

When married couples separate, no matter how long the marriage, pursuant to section 56 if the Family Relations Act the parties have a presumptive one-half interest in all family property. While under section 65 of the Family Relations Act one or both separating couples may request a reapportionment of assets in their favour, the fact is that the Courts must be persuaded to depart from the presumptive equal splitting of property. This means that with married couples, upon separation property division is somewhat simplified in quantum percentage save for the rare time when there is evidence to suggest that it would be unfair to proceed with the equal division.

All of the assets, property and debt in a marriage are presumed to be family assets and up for division. A party must demonstrate that the exclusion of an asset, property or debt in the division (or reapportionment) is appropriate or else it will be thrown into the pot for consideration.

Conversely, when common law couples separate, there is no presumptive equal split of family assets. As a matter of fact, there are no “family” assets per say, but rather a bundle of assets or property in one or both parties’ names which must be plodded through to determine the quantum of ownership that is appropriate in a given situation. One (or both) parties must claim their stake in the assets or property by arguing that the other party has been unjustly enriched by their own contribution. In basic terms, what needs to be established is that one spouse has been enriched, there is a corresponding deprivation to the other spouse, and there is no legal reason for the enrichment.

This argument can attach to all sorts of assets or property, including but not limited to real property (ie. land and home), vehicles, RRSP’s, pensions and bank accounts.

In common law separations the equitable relief of quantum meruit is generally sought alongside unjust enrichment and roughly translates from Latin as “reasonable value of services”. The approach when arguing this relief usually takes the form of establishing the fair market price for such services as housekeeping services, cooking and child rearing, which in some cases can be attached to the trust claim for unjust enrichment as a means of strengthening it or used in the alternative to such a claim (ie. 10 years at $2000 a month average services rendered established and then this claim settled by a portion of the proceeds of sale of the home).

What is disturbing to many common law parties who apply to Court to enforce their legal rights is that unlike married couples, they may have to first prove the common law nature of their relationship (using the factors listed above) and then they must prove their contribution to assets and property which they always were assured of or assumed they had an equal share in. The Court process may include providing proof from a non-title party to a home of the following services rendered when it comes to the home: gardening services, renovations undertaken, money invested and maintenance services. It can get as tedious as reviewing bills for renovation supplies to see who paid them and having 3rd parties testify to who they saw sweeping the deck and clearing the bushes every Saturday and also what might be charged for such services.

2. Spousal Support

As mentioned above, a common-law partnership is only established in British Columbia after 2 years of a marriage-like relationship. It is only after this two-year mark that upon separation one party can claim spousal support from the other. It is important to note that unlike in marriages, the decision to seek relief of spousal support in Court must be made within 1 year of separation. There is no such deadline upon marriage separation nor is there a minimum length of marriage before one party can receive spousal support from the other. In theory, while rare, a party that was only married for a few months and did not cohabit prior to marriage can request and receive spousal support from the other.

The amount and length that one party receives spousal support from the other is determined in identical fashion in the breakdown of common law relationships and marriages.

3. Child Support

There are no significant differences in basic child support received by parties who were in common law relationships versus those in marriage. The amount and length are determined in identical fashion in the breakdown of common law relationships and marriages.

4. Custody and Access

There are no differences between the manner in which these issues are determined in common law relationships versus those in marriages. The determining factor is the best interests of the child(ren).

BC DIVORCE AND VANCOUVER FAMILY LAW LAWYERS MANAGING PARTNER LORNE MACLEAN AND ASSOCIATE JUSTIN WERB

Wednesday, February 3rd, 2010

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Smart BC Divorce Tip #3 – Protect Yourself At All Times

Thursday, January 21st, 2010

Lorne MacLean, Vancouver BC Family Law Lawyer, at the MacLean Family Law Group is delighted to announce Smart BC Divorce Tips # 3 is now available at our youtube channel called Protect Yourself at All Times-Winning the Financial Aspects of your Divorce and Family Law Case has just been released to positive reviews. These tips are critical if you are involved in a BC Divorce, BC Child custody, BC Child Support, BC Spousal Support and BC Family Asset Division case.

Step 1 – Obtain Proof of all assets and Debts and All Income and Expenses

Copy tax returns, credit card statements, bills, business information and anything that might help you determine how much money you will need to live on and what marital assets you are entitled to. Go through the garbage or install spyware on a computer, if necessary. Tax returns don’t always show the real income to be used for your case so make copies of all company financial documents as well. Store these documents away from the Home and redirect your sensitive mail to a safe location.

Protect Your Money and Assets

Take half of the money from a joint account, and put it in your own name. If your spouse tries to clean out the account, you won’t be able to access that money until a judge says so. This way, you will have access to money, but make sure that you keep a record of how you spend it and this is not an excuse to try to get rid of or hide assets, so act honestly. Consider a restraining order to freeze assets, closing joint credit card accounts and lines of credit to prevent them being run up by your soon to be ex-spouse.

Be Patient

With joint marital assets like homes and stocks probably worth much less than they were a few years ago, some couples are agreeing to stay together until the financial tide turns. If a moneyed husband pushes for divorce because the economy makes it less expensive for him to cash out now, press him for an upside by asking for a bonus for giving up access to a potential gain or by remaining in as a joint owner of the asset.

Lorne MacLean High Net Worth Divorce Lawyerimg_5802

HIGH INCOME BC SPOUSAL SUPPORT AND CHILD SUPPORT GUIDELINES CALCULATION AND GROSS UP FOR LOWER TAXES

Tuesday, December 1st, 2009

img_5989BC spousal support and child support awards start with a proper calculation of the BC paying spouses spousal and child support guideline income which can be taken from tax returns, financial statements showing pre- tax corporate earnings. In cases of the paying spouse earning a foreign income, a figure that may be grossed up to reflect a Canadian equivalent income for exchange rate differences and to take into account the income may be received on a tax free basis or on a reduced tax basis compared to the prevailing rates in Canada. Income will often also include bonuses, severance pay and overtime.

The recent Court of Appeal decision of Gonabady-Namadon v Mohamadzadeh dealt with an appeal from a trial judges’s finding that the husband had failed to disclose his true assets and income and had provided no proof of the taxes he paid on income he earned as a resident of Iran nor any proof of what tax rates in Iran were. The trial judge made negative findings against the husband but fixed his income at $250,000 per annum and found that despite the 13 year marriage where the wife had a child she was not entitled to spousal support. The wife was awarded full recovery of her legal fees for the husband’s steadfast refusal to disclose his true income and assets.

The wife appealed and was successful in increasing the guideline income for the husband from $250,000 to $350,000 per annum based on a gross up for lower tax rates in Iran meaning the husband’s available income was much higher than an equivalent similar gross income in Canada. Further, despite the fact the wife was a doctor with the ability to earn a good income the Court of Appeal held she was entitled to spousal support for the low end of the duration being 6 years on a marriage length of 13 years at a monthly payment of $2300.

I have extracted the key paragraphs from the decision below.
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BC COMMON LAW RELATIONSHIPS, UNMARRIED COUPLES AND RIGHTS TO BC CHILD SUPPORT AND BC TRUST AND PROPERTY CLAIMS

Tuesday, December 1st, 2009

A recent BC Supreme Court common law trust and property claim and step parent child support case Hall v. Becker explains nicely how a common law trust claim and property claim work. It also analyses the duty at BC law of a BC step parent to pay BC child support and considers the duty of both the natural father and step parent to pay child support in a case where the mother has re-partnered. A step parent is liable if married to the natural parent OR if the parties lived in a marriage like relationship for a period in excess of two years and if the step parent has made any contribution to that child for more than 1 year and the claim is brought within 1 year of the last contribution for the benefit of the child.
BC constructive trust claims require the claimant to prove, enrichment to one spouse, deprivation to the other ands an absence of a legitimate reason why no award should be made for this enrichment. I often tell my clients it is a cost benefit analysis which requires the claiming party to prove they gave more than they got. Awards in common law relationships are commonly less than a married person would receive upon marriage breakdown.
To read more see the extracts I provided below and if you have any questions call me Lorne MacLean at 604-602-9000.
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BC FAMILY LAW ANNOUNCES FREE BC DIVORCE AND SEPARATION QUESTION AND ANSWER FORUM ON MACLEAN FAMILY LAW GROUP’S FACEBOOK PAGE

Monday, November 2nd, 2009

Please feel free to post your BC divorce and British Columbia separation questions on BC Child custody, BC access, BC Spousal support, and BC family assets on our MacLean Family Law Group facebook page. Please note that the information provided in response to general inquiries made on the facebook forum herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to any divorce or BC family law issue in British Columbia, you should seek professional assistance. We have appointments available in Vancouver, Fort St John and Penticton British Columbia, and we can offer information, advice, and assistance with respect to helping you get sound advice and strategies concerning BC family law, divorce, child and spousal support and property division issues.
Make an appointment using our Initial Consultation Sheet or call us toll free at 1-877-602-9000.

We would appreciate public input as to whether British Columbia family law client’s would appreciate a regular internet TV call in show that would answer general family law questions.

BRITISH COLUMBIA SEPARATION AND MARRIAGE AGREEMENT ENFORCEMENT AND BC VARIATION UPDATE-JUST BE FAIR WITH ME

Friday, October 30th, 2009

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A critical new British Columbia Separation Agreement enforcement and BC separation agreement case was released recently in Rick v. Brandsema [2009] S.C.J. No. 10
If you are about to enter into a BC separation agreement or consider a British Columbia separation or separation agreement or marriage agreement you have signed to be unfair or unconscionable call us at 604-602-9000. The summary below was prepared by one of our very capable articled stdents, namely Jaqua Page who works out of our Vancouver and North Peace office.

This was an appeal to the Supreme Court of Canada from a decision of the British Columbia Court of Appeal, to set aside an award made to the wife by the trial judge, ordering the husband to pay damages in the amount of $649,680.00 on the grounds that the separation agreement signed by the parties was unconscionable and therefore unenforceable.

The parties married in 1973 and separated in February 2000 after a long and difficult marriage. There were five children to the marriage. During the course of the marriage the parties acquired assets and real property, including a dairy farm the value of which was the subject of the appeal.

The parties continued to live together for a number of months after the separation. They signed a separation agreement in December 2001, which was drafted with the intermittent assistance of two different lawyers, the services of two mediators, advice from tax accountants and other professionals. They were divorced in January 2002 and the wife brought an action a year later to set aside the separation agreement on the grounds the agreement was unconscionable or in the alternative that there should be a reapportionment under Section 65 of the B.C. Family Relations Act. The husband was found to have severely undervalued the property and concealed funds.

The SCC emphasized the importance of recognizing that the area of family law creates a uniquely difficult and vulnerable environment. To ensure fairness, the court found that there is “a duty to make full and honest disclosure of all relevant financial information in order to protect the integrity of the resulting agreement” when separating parties are in the process of settling an agreement. The case also represents the creation of the new term “psychological exploitation”, which is established when one party takes advantage of the other party’s mental state during negotiations of familial matters. In this case, there was evidence the husband was well aware of the wife’s mental fragility and that he had falsely exaggerated the dairy farm’s debts as well as claiming inappropriate tax deferment, decreasing the wife’s value of the company, when there was no evidence of a future sale.

The appeal court, applying Miglin, rejected the findings of fact of the trial judge that there was a power imbalance between the parties due to the wife’s mental vulnerability and regardless found that any disparities were cured by the wife’s access to professional assistance. The SCC respectively disagreed with the Court of Appeal’s interpretation of the test in Miglin in relation to the weight that should be given to professional assistance. The court held that the mere presence of professional advice does not extinguish the potential negotiating abuses that can occur in reaching an agreement, stating that a genuine bargain can only be reached when both parties are fully informed of the relevant information.

The SCC said that the “duty” flows from the judgment in Miglin with the acknowledgment that legal issues surrounding the breakdown of a marriage take place in highly emotive situations. As a result special care must be taken to ensure that negotiations between spouses are free from “informational and psychological exploitation”. The court stated that the degree of dishonesty will determine whether a separation agreement is open to judicial intervention.

The court was entirely supportive of the trial judge, affirming the principle that an Appellate Court should not reverse the findings of fact made by a trial judge unless there was a palpable and overriding error. In addition, a trial judge has discretion when considering tax deferment in relation to the division of assets, concluding that either damages or s66(2)(c) of the Family Relations Act that may include ordering a spouse to ‘pay compensation’ to the other spouse ‘for the purpose of adjusting the division.’ were suitable remedies when the terms of the separation agreement substantially deviated from the intent of the legislation.

WHAT HAPPENS WHEN A SPOUSE DISPOSES OF MONEY OR HIDES ASSETS BEFORE A BC MARRIAGE BREAKS DOWN?

Tuesday, September 29th, 2009

img_5994I am often told by my BC Family Law clients that they suspect family assets or family money have been hidden or gone missing near the end of a marriage. To avoid this problem I recommend you keep a close eye on assets, bank accounts, company financial statements and credit cards amongst other assets and liabilities. Make copies of financial documents and keep them is a safe place and act immediately if you suspect fraud against you.

In the event assets have been disposed of, a court must balance the need to fairly divide ALL of the assets at the end of a marriage against allowing days of trial time to be occupied by a roving investigation into each spouse‚Äôs spending habits throughout what may be many years of marriage. On the one hand we have a line of cases that say once hidden assets have been proven the court might punish the guilty party by awarding all the remaining assets to the innocent spouse as ‚Äúnon-disclosure is the cancer of matrimonial law litigation‚Äù. On the other hand the BC Court of Appeal has recently released the decision of Kuo v. Chu, 2009 BCCA 405 which applies a potential time and fairness limit on the investigation of past dispositions: (more…)

BC Family Asset and British Columbia Property Division and Reapportionment in Short to Medium Length Marriages Ending in British Columbia Divorce

Friday, February 20th, 2009

As Vancouver family lawyers and Fort St John
family law and divorce lawyers, we are often asked what BC courts do in shorter marriages in British
Columbia that end in divorce both with respect to British Columbia spousal
support and BC family asset division. We are also frequently asked what kind of
BC assets are divided at the end of a marriage?
We advise people that the test is- whether the assets were ordinarily
used for a family purpose. If you have a specific question concerning BC family
property division contact us as the courts have construed a family asset to
include a wide variety of family property. Our BC family law lawyers can be
reached toll-free throughout the province at 1-877-602-9900.

A recent British Columbia Court of Appeal
decision applying the spousal support advisory guidelines and dealing with
reapportionment of property in a seven-year marriage provide provides updated
guidance in determining what is a short marriage for purposes of
reapportionment of BC family assets and how it impacts on an award of
entitlement and quantum of spousal support in British Columbia.

In the decision of Wang V. Poon [2008] B.C.J. No
2113 our British Columbia Court of Appeal dealt with a seven-year marriage with
husband was 76 years old and his wife was 47 years of age some 30 years his
junior. The husband brought the majority of assets into the marriage and his
assets were used to purchase various condominiums.

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