In Ontario, where a person dies without a valid will, they are said to have died “intestate.” When a person dies intestate, the Ontario Succession Law Reform Act stipulates that the deceased’s spouse is entitled to a “preferential share” of his or her estate. Presently the preferential share is $200,000.00. As such, if the deceased’s estate is worth less than $200,000.00, then his or her spouse will receive the entirety of the estate.

Interestingly, the Succession Law Reform Act defines the term “spouse” as either of two people who are married to each other or who have entered into a void or voidable marriage in good faith. If spouses separate but do not divorce, technically speaking, they are still “spouses” of one another. The result – if your spouse dies intestate, even if you are separated and even if either of you is cohabiting with another person, you will still be entitled to a ‘preferential share’ in your spouse’s estate provided that you have not divorced. This illustrates the importance of having a validly drafted will. 

Often in Family Law proceedings clients feel bogged down by requests to produce documents.  Clients have at times expressed to me a dissatisfaction with having to produce bank statements for past years, attachments from income tax returns,  documents that  are not easily obtainable or papers that may have existed in the past but may take some work to retrieve.  So what do you have to produce in your Family Law proceeding and why? 

The obligation to produce financial disclosure is imposed by the Family Law Rules and by the Child Support Guidelines (CSG).  The requirement to prove income is found in Rule 13 which deals with the production of Financial Statements and the requirement to “attach any documents to prove the party’s income that the Financial Statement requires”. Your Financial Statement will not be accepted for filing by the Court unless it is accompanied by proof of your current income,  a copy of your notices of assessment and any notices of reassessment for each of the past three taxation years.  Where the notices of assessment and reassessment are unavailable, an Income and Deductions printout from the Canada Revenue Agency for each of those years must be produced, whether or not an income tax return was filed.

If the other party believes that your income statement does not contain enough information for a full understanding of your financial circumstances, under Rule 13(11) the other party can ask you to give them “any necessary additional information”.  The other side has to ask you directly for that information and if it is not provided by you within seven days, they can seek a Court Order that you provide the information. 

Rule 19 deals with disclosure of documents and allows either party to view and / or copy any documents mentioned in the Application, Answer, Reply, Notice of Motion, Affidavit, Financial Statement or your Net Family Property statement.  Under this Rule you can  request an  affidavit of documents from the other party and they can request one from you. This Affidavit of Documents must list every document relevant to every issue in the case that is within the party’s control or available to the party upon request.  All documents that you  list must be made available to the other party for viewing and copying.  In some circumstances a court order may also be obtained compelling a third party (someone other than the spouses in most cases) to disclose documents and, if that third party is a corporation controlled by one of the parties,  the corporation may be required to file an affidavit of documents.

The Child Support Guidelines Section 21 also sets out an extensive list of documents that the parties must provide in determining child support  and this list is often used as a reference for required disclosure even when someone is seeking spousal support even where there are no children or grown children.

So the question is…when have you produced enough documentation to satisfy the Rules and the Guidelines? 

The goal in family law is to promote and obtain fair resolution of family matters; providing full and frank disclosure is seen as a primary means to that end.  Sometimes however, parties use the exercise of asking for production in attempts to extend , delay or frustrate the family law proceeding.  The Courts have held that the disclosure process cannot be used to cause delay or used in an attempt to reap tactical advantage. Courts must look at whether the burden of providing some particular documentation is too great in the circumstance and in relation to the value that particular document or documents will have in the resolving the dispute or determining entitlements.  Judges have also said that in looking at requests for disclosure there must be an element of proportionality, common sense and fairness.  It has even been opined that just as non-disclosure can be harmful to a fair trial, so can excessive disclosure be harmful. 

So where to draw the line?  It may be best to think about putting all your cards on the table in order to try to reach an agreement in your family, but if the requests keep coming and they don’t seem to make sense , you can say enough is enough. 

The first step to complete in your financial statement relates to your income.  Your income is important in order to determine the amount of child support you will pay in accordance with the Federal Child Support Guidelines. 

Determining what your income is is usually fairly straight forward if you are a T4 employee.  You state what your income is based on your pay stubs or your T4 from the previous year.  Remember that these are monthly figures so divide your annual income by 12 and if you max out on your CPP and EI divide the maximum payment by 12.   You will need to provide a copy of your pay stub with year to date income, as well as your last three years income tax returns and notices of assessment. You will note the other boxes for such things as interest income earned on your investments, Child Tax Benefit, rental income etc. Refer to your tax return from the previous year to see if you received any income from these areas in the past.

If you are not a salaried employee but are self-employed, i.e. a sole proprietorship, partnership or a corporate entity, your income becomes much more difficult.  Although your tax returns may indicate a line 150 income, this income is not generally what is used for support purposes. In a sole proprietorship or partnership, it will be necessary to review the Statement of Professional Income or Business Activities.  Many of the expenses which you are able to write off for income tax purposes cannot be deducted for support purposes.  It may be necessary to add back a portion of those deductions i.e. meal allowance, travel, car allowance, home office expenses etc.  You may wish to seek the assistance of your accountant to determine your income for support purposes.

In a corporate situation it may be necessary to request the assistance of a valuator to perform an income determination.  Your lawyer will discuss these requirements with you when you meet and initially talk about your income for support purposes.  You will be required to provide in addition to your personal tax returns, copies of the corporate tax returns, financial statements, shareholder agreements, and loan agreements, to assist the valuator in making that determination.

It is important to be truthful about your income. Attempts to hide income will always come back to bite you as the other side will continue to dig and request further disclosure in an attempt to prove that you are hiding income. If you gather the income information to the best of your ability and hire experts as may be required to assist in determining your income, the process will be smoother and hopefully save you money in the long run.

You can view the child support guidelines and suggested disclosure lists at: http://www.attorneygeneral.jus.gov.on.ca/english/family/divorce/support/

FishingMy daughter, who lives in Yellowknife, recently sent some pictures of the family fishing in the Yellowknife River.  The picture to the right is that of my son-in-law and my granddaughter, who is 3 years old.  Both Father and daughter were enjoying the moment with the expectation of catching a fish on a beautiful summer day.  I call it enjoying the “simple pleasures” of life.

All too often a client will say how unfair it is that the other party has more money and so they can afford to take the children to Wonderland or on a fancy vacation. They believe that the children are more endeared to the parent providing such perks and feel bad that they cannot. This frequently becomes a greater concern once we are in the summer months.  There ends up being a competition between parents which is not in the child’s best interest.

The fact is that the children really just want to spend time with their parents, whatever they are doing.

This summer take a moment and explore the world within your own four corners with your child.  You could consider 

  • A trip to a local park  – this can become an adventure when you take a picnic basket, books to enjoy, a Frisbee to throw, a bird book to check out the different kinds of birds;
  • Take photos of local sites and make a scrapbook together of “Our Town”
  • A trip to a nearby dock, river, or lake to throw your line in the water and see what happens;
  • Perhaps your town has a free water playground for the children or a wading pool or town pool;
  • Plan a trip to the local library – often during the summer there are special events, story hours for children; arts and crafts.  Your child will love exploring all the books available to them
  • Plan a scavenger hunt in your neighborhood – invite others on the street to participate
  • Read the local newspaper or view your  Town’s website for upcoming free events – often there are concerts or outdoor movies

Remember as much as possible when with your children to declare a “technology freeze” – turn off that cell phone, iPod or other gadget and simply enjoy the day and the time you have to spend with your children.

Enjoy your summer and make it a plan to throughout the year enjoy the “simple pleasures” of life. 

The law clerks at Barriston have focused on the various sections of a Financial Statement.  Part 4(b) identifies household contents, vehicles and other items.

Just as a quick refresher: remember that your Financial Statement is a snapshot of your financial situation.  Only include an asset that you are the registered owner of.  For example, it is common for a vehicle to be registered in one spouse’s name but regularly used by the other.  Even though your spouse may continue to use and be in possession of the vehicle, it should be listed on your statement if you are the registered owner of that vehicle.  The transfer of an asset, like a motor vehicle, can be part of the calculation to equalize your net family property.

Another important guideline to keep in mind when you complete not only this but other asset sections is that only market value is listed.  It not proper to use the purchase price or cost to replace an item.  With the exception of items such as antiques or jewellery, the general rule for valuing the contents found in most homes would be to use garage sale prices.  If you contact a third party to help you determine values for your property, ask for something in writing so it can be produced to substantiate the amounts you show in your Financial Statement.

If you own a cottage or other vacation property, be sure to include household items, boats, etc. located there as well as significant items loaned to family or friends.

Often, a single reference to “household contents” or “cottage furnishings” can be further detailed in schedules that are attached to explain these one-line descriptions.  These schedules can also be an important tool during negotiations to help spouses identify what items they want.

Not to diminish the importance of completing your Financial Statement properly, parties are often encouraged to work out the division of their household contents between themselves.  A lot of unnecessary legal fees can be spent fighting over pots and pans and garbage cans.

The value for your vehicle(s) can be relatively easy to establish.  You can contact a local dealer or some law firms, such as Burgar Rowe, subscribe to a monthly service that provide wholesale and retail values.

Jewellery can also be valued by a local jeweller.  Remember, do not use the replacement cost listed on an insurance policy as this value can sometimes be 2 to 3 times higher than its market value. 

In addition to furniture and cars, this section could include other items such as antiques, fine china and silver, classic cars and works of art.  Doug Manning’s post, “When Sports Fans Divorce”, illustrates other property that could be included.

I would also encourage you to read Katie Lloyd’s post, “The Value of Your Stuff”, which you may find very helpful as you complete your Financial Statement.

The Family Law Lawyers at Burgar Rowe are pleased to introduce their new mediation and arbitration services.  Increasingly over the past 10-15 years the courts have been inundated with family law cases.  This has caused a considerable backlog of court cases that have caused countless separating couples needless delays and legal expenses in resolving their family law issues (child custody, child support, spousal support, property division, ownership & occupation of the matrimonial home, etc.).

The Family Law Lawyers at Burgar Rowe have been offering mediation and arbitration services on an informal basis for several years.  We are now formally offering Mediation and Arbitration services through ‘Burgar Rowe Resolution Services’.  Tom Dart, Kim Kieller, Doug Manning and Jodi Armstrong have, among them, over 70 years of combined experience as family law lawyers and over 25 years of experience as Mediators and Arbitrators sanctioned by the Ontario Association of Family Mediation and the Arbitration Institute of Ontario.  We bring a wealth of experience and creative problem-solving strategies to clients who wish to retain our services to act as Mediators or Arbitrators in their dispute or to represent them as their lawyer within the context of Mediation and Arbitration processes.

Our new Burgar Rowe Resolutions Services website will go live soon, and we’ll post a link to it as soon as we have one.

On a related note, the lawyers and staff of the Burgar Rowe law firm (23 lawyers and 40 staff) will be merging their practices with the law firm of Purser Dooley Cockburn Smith LLP (15 lawyers and 30 staff) effective October 1, 2011.  The merger will result in the establishment of Central Ontario’s largest full service law firm providing advice to individuals, corporations and municipalities throughout central Ontario in the areas of corporate/commercial law, real estate and estates, family law, municipal and land use planning and civil litigation including commercial litigation, employment and insurance litigation.

By combining practice groups and our firm administrations we will be able to offer the greatest depth and breadth of advice to our clients.

For more information please see our News Release.

One of my friends was recently faced with a decision she found to be somewhat insulting.  Her husband’s family has a “family business”, which business was incorporated.  The corporation was in the process of re-structuring and wished to issue shares to the son (her husband) and daughter.  It was requested that she sign a document indicating that she would not force the sale of the corporation if she and her husband ever separated or divorced. The Wife’s first thoughts were that this request was unfair as she believed that if her husband had an interest in the corporation then part of that interest also belonged to her.  She certainly hoped that the sister’s spouse was also being requested to sign the same document.

I suggested she needed to speak with the corporate counsel who could better explain that in fact the family was likely worried about the state of the corporation on a long term basis – they could not be faced with having to buy her out or her forcing a sale of the corporation in the event of divorce.  It was important to safeguard the corporation and in fact the sister’s spouse most likely was being required to sign a similar document.

In Family Law married parties are entitled to a division of property based on their net family property.  In order to determine a value for the husband’s interest i.e. the value of his shares in the corporation, he would be required to provide, as part of his full and fair financial disclosure, a valuation of his shareholdings in the family corporation.  This should be prepared by a certified business valuator or other method agreeable to both parties.  Once the Wife received the valuation, if she was not satisfied with the value, it is open to her to proceed to obtain her own critique of the valuation and arrive at her own values.  Once the value has been agreed upon this would be inputted into the net family property calculations under the husband’s property.  So in fact, by valuing the husband’s shares in the corporation and putting that on his side of the ledger, the Wife is receiving her one-half of the value of that asset.

It is important in these situations to obtain advice from a lawyer who specialize in the area of corporate law and one that specializes in family law prior to signing any documents provided to you by your spouse or his/her family relating to the family business to ensure that you receive all that you are entitled to.  Any agreement signed by you should require that you obtain independent legal advice.

Although you may believe that you will never divorce and this issue is a non-issue, it is better to safe guard your interests just as the family is safe guarding the interests of the corporation.

The matrimonial home is often the single largest assets owned by separating spouses. The Family Law Act (F.L.A.) recognizes and affords special protection to the matrimonial home and addressing both property and possessory entitlements. The legislation does not apply to common law spouses.

The ownership definition as set out in the F.L.A. is very broad in that it includes every property that a person has an interest in at the time of separation.

The F.L.A. net family property equalization excludes from the equalization those properties each of the spouses owned at the date of marriage.

The exception to the pre marriage property exclusion is the matrimonial home. Although there is provision under the legislation for an unequal division of the equity in the matrimonial home in relationships of less than five years, a spouse who brings a home into the marriage runs the risk of losing the accumulated equity in the home if the couple reside in the home at date of separation.

One of the key factors in the definition of the matrimonial home is that the home must be occupied by both spouses at the date of separation. In the event that one spouse brings a home into the marriage and that home is sold, and the proceeds used to purchase a replacement matrimonial home, the first home loses the matrimonial home label and the spouse owning the home is able to deduct the value of the home at date of marriage.

Couples can own more than one matrimonial home if the two residences (i.e.: home and cottage) were occupied at date of separation with sufficient frequency.

A couple may, as well, register a designation on title which identifies one particular residence as being the matrimonial home.

The matrimonial home is given further protection when, during marriage, spouses use excluded properties (i.e.: inheritances and gifts from third parties) to pay down the mortgage on the matrimonial home. In those circumstances, the excluded assets lose their excluded status.

The F.L.A. also provides that spouses have a right to possess or reside in the matrimonial home whether the spouses have legal registered ownership in the matrimonial home or not. This right of residence cannot be bargained away by agreement.

In order to preserve the equity in the matrimonial home, The Family Law Act requires that any mortgaging of the matrimonial home require the written consent of both spouses, even if one of the spouses is not a registered owner of the matrimonial home.

In most circumstances, the matrimonial home is owned jointly between the spouses, either as tenants in common or joint tenants. There is no statutory authority for a Judge under the F.L.A. to order one of the registered co-owning spouses to convey his or her interest in the matrimonial home to the other spouse. Under the Partition Act, in the event that spouses cannot agree to settle each other’s respective interests in the matrimonial home, the matrimonial home must be sold in order to determine the spouses’ respective interests.

In circumstances where parties are getting married and one spouse owns a home where the couple plans to reside during the marriage, it is strongly recommended that the parties execute an agreement that protects at least the equity in the said home as it existed at the date of marriage.

Let me introduce myself as the newest Barriston blogger.  I joined the firm, as a partner last month.  Prior to this I practiced, mostly as a sole practioner, for the past sixteen years.  I have practiced law for twenty five years, mostly in the family law area.  I practice in the courts, but prefer mediation and arbitration  – more about that in later blogs.  The rest of my “bio” is on the regular site.

Over the past twenty five years, the most misunderstood definition in law is the “common law” relationship.  The area with the least knowledge is each party’s rights in a “common law” or unmarried relationship.

In Ontario, the Family Law Act does not define a “common law” relationship.  It simply provides rights to support to parties who have cohabited together for three years, or less time if there is a child of the union.

Technically, the only right that a party has in an unmarried relationship is to support – not to property.  The support applies to child and spousal support, if there are facts supporting such an entitlement.  Support may sometimes apply for non-biological children (step children) in certain circumstances. 

Provincial law defines property rights in Canada.

In Ontario,  there are no statutory rights to property division from one party to the other, in an unmarried relationship, regardless as to how long the relationship has lasted.  Many people in this kind of relationship believe that after “x” years they are entitled to a property division – part of the home or the other person’s pension, just like married people – and the term I often hear on initial consultations is three or five years.  Not true.

However, this does not mean that at the end of a long unmarried cohabitation, there are no property rights or obligations.

First, joint property is divided as all joint property – so if the home is jointly owned, each party is entitled to his or her share and has the rights in law to deal with that property the same as a married couple (with some exceptions, such as exclusive possession orders) or commercial partners.

Secondly, the law has created a “fiction” to protect parties in regard to such claims.  This fiction is known as the “constructive trust”.  Essentially, the argument is that the person who owns the property holds a portion of the property in trust for the non-titled party/partner. The history of the development of the constructive trust is monumental and was a huge  shift in the law of Canada.  Originally a woman in the Prairies named Mrs. Murdoch separated from her husband after a lengthy relationship (in this case they were married, but this was before the law reform statutes of the nineteen seventies), and she was not “on title” to the family farm.  In dissent, Justice B. Laskin espoused that it was unfair for Mr. Murdoch to have sole title to the property so he imposed an old equitable remedy from the English law to impose a trust on Mr. Murdoch so that he held fifty percent of the property for Mrs. Murdoch.  It was fair process and provided relief to Mrs. Murdoch for the years she spent on the farm, working, caring for animals, fixing fences, raising the children, etc. Mr. Murdoch received an economic benefit from Mrs. Murdoch – and she did not get paid for it (in this case it was defined as a “deprivation”).  There was no real or legal reason for the deprivation.  So Mrs. Murdoch would have received half the farm, had Justice Laskin had his way!

Over the years the constructive trust remedy has evolved and had influence and a lack of influence.  Most recently, the Supreme Court of Canada released the most substantial case influencing non-married parties in years. The case decided has clarified and guided lawyers in regard to unmarried couples and their families.  In making property decisions for unmarried partners, (both heterosexual and same sex parties), the court introduced the term, “Joint Family Venture” or “JFV”  to the legal lexicon.  In deciding whether property division is a fair remedy for an unmarried couple, the test is defined by four leading facts to consider: mutual intent, economic integration, actual intent and the priority of the family.

So, how does this affect you?  The short answer is that if you are in a relationship outside of marriage for whatever reason you decide to do so, you have support rights.  You might also have a right to the other party’s property by having legal title or a right that party’s property over the years as a result of your “joint family venture”.   A party in a cohabitation may not have the same rights to property as one in a marriage, but the law has established fictions, goalposts and pillars to provide relief when and if it is right to do so.

One of the ‘four pillars’ of court reform announced by Ontario’s Attorney General, Chris Bentley, last year (2010) was to provide up front information for people who were suffering from marriage breakdown. The way in which Minister Bentley’s strives to provide this information is the “MIP”. Many separating couples simply do not know the range of options open to them and do not have enough knowledge about the law or the resources in their community which are there to assist them when their intimate relationships fail.

The Mandatory Information Program has been in place in Toronto Ontario for several years. It has now been expanded to the 17 ‘family court sites’ in Ontario and is about to be expanded further to all 40 Ontario Court sites.  These programs are conducted by the mediation groups which have been granted individual contracts with the Ministry of the Attorney General to provide the MIP as part of their overall services to the family courts in Ontario.

Couples who head off to family court to resolve their issues will now have to attend a MIP session. If they do not, then they won’t be able to proceed through the court. For reasons of safety and decorum at the sessions, separate sessions are arranged for each of the parties in a case so that both are not in attendance at the same time. So “the Applicant” in a case does not show up at the same time as “the Respondent” in the same case.

The sessions are ‘generic’ in that they do not discriminate between the type of case confronting the parties. The information is vast and informative, but people who have no children must attend sessions designed for those who do have children. Those who have little or no property must attend sessions designed to educate those who do have property. This is unfortunate but is a result of the limited resources presently available to the government of the day.

The script for the program is quite detailed and covers all issues likely to be faced in the family court from the law to the processes required by The Family Court Rules. It takes about 1.5 to 2.0 hours to complete attendance at the program. Those who go learn a lot about family law, the effect of relationship breakdowns on children and the various methods such as mediation, collaborative law and arbitration as ways in which to resolve their disputes outside the court process.

One of the main goals of the program was to actually promote mediation and other dispute resolution processes as an alternative to the court based model. Mediators are very excited about the opportunities created for them by the information spread to the public through the MIP. The hope is that many cases which currently would naturally head to court can be diverted early on to mediation and, as a result, a speedier and much less costly resolution of the issues facing the separating couples.

If the MIP is to be of any long term benefit, there needs to be quality resources within each of the 40 communities to lend credibility to the promises made at the information sessions. In each community, there must be many good competent mediators, mental health professionals and lawyers willing to provide these other good methods of dispute resolution at affordable rates. As we have emphasized on our blog many times, the adversarial system of family law dispute resolution must lose its lustre as the first choice for families and children caught up in the trauma of separation and divorce. Hopefully, the MIP will begin to spread the word and everyone will be better off for it.

If you want to learn more about Barriston Dispute Resolution Services, please visit our website and follow the link.