Dividing the Value of the Property of the Marriage 50/50—But it just isn’t fair!

As explained elsewhere in my website, the value of the property of the marriage is supposed to be shared equally (the value of the property, not the actual property).  But sometimes this just isn’t fair!   
 

 In an earlier blog, I explained how the matrimonial home is treated   differently than other property.  For example, Sarah owned a $300,000. house prior to the marriage which was then  treated as the matrimonial home during the course of the marriage—i.e. the property was ‘ordinarily occupied’ by  the parties’ and served as a family residence as of the date of separation.   At the date of separation, the home was worth $350,000 (an increase in $50,000).  The whole value of the home, however, would go on Sarah’s side of the ledger, not just the increase in the value of the home from the date of marriage to the date of separation.  In other words, Sarah’s spouse is entitled to half the full value of the home.  This doesn’t seem fair, does it?    
 The law recognizes that sometimes an even split of the marriage ‘spoils’ might not be fair.  Section 5 (6) of the Family Law Act addresses this subject….. 
 
Variation of share 
(6)  The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to, 
 
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage; 
 
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith; 
 
(c) the part of a spouse’s net family property that consists of gifts made by the other spouse; 
 
(d) a spouse’s intentional or reckless depletion of his or her net family property; 
 
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years; 
 
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family; 
 
(g) a written agreement between the spouses that is not a domestic contract; or 
 
  (h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property. R.S.O. 1990, c. F.3, s. 5 (6). 
 
So can Sarah be reassured that Section 5(6) will address the unfair result of having to share the value of her home 50-50?  
 
 Please note the word  “UNCONSCIONABLE”.  
  Unconscionable means really, really, really UNFAIR.  The Courts have equated the term with “shocking”,  much more than “mere unfairness, harshness or injustice”.   The threshold one must cross in order to open the door to an unequal division is “exceptionally high”.   
 
In other words, Section 5(6) will not necessarily come to the rescue of poor Sarah.    Nor does it help in many cases where an equal division of net family property would appear demonstrably unfair.     
 
 
 Sarah should have invested in a marriage contract, one that protected her interest in the matrimonial home she brought into the marriage.  I know, I know:   the idea of entering into a formal contract is somewhat offensive to the sensibilities of one about to embark upon a supposedly enduring relationship, one based on true love, one of non-ending connubial bliss, lasting until death to we part yada yada  yada…. Regrettably, many relationships (over 50%) do not end up that way. 
 
Life is about change.  People often change overtime.  But people do not necessarily change in the same direction; they grow and change in divergent ways.  Often, with the passage of time, these lovebirds, who once pledged eternal love, one day look across at each other over breakfast and wonder who that stranger is at the other end of the table.   Sadly, it happens all the time.  That’s why there are so many of those gosh-darned family lawyers—those custodians and overseers of broken hearts and shattered dreams—floating around.  
 
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Mother and Father–Is there a Double Standard?

The Children’s Law Reform Act governs custody and access in Ontario.  Section 20 of this Act states that “the father and the mother of a child are equally entitled to custody of the child”. 
 
So are husband and wife, father and mother treated equally under the law?  In my opinion….. 
 
 

 In my opinion–and remember this is only my opinion based on my experience—there is a double standard.  Prevalent in our society is the deeply engrained belief that as we humans emerged from the primordial ooze, women were bestowed with an atavistic maternal instinct. Men, on the other hand, know how to hunt, swing from tree to tree, beat our chests and procreate; however, we are specially challenged when it comes to parenting.    I find that all things being equal, women have a distinct advantage over men when it comes to custody disputes.   
 
Take for instance a situation where a woman, deciding the relationship is over, leaves the home with the child without any warning.  If the man contacts the police, alarmed at the sudden disappearance of his spouse and child, the police will most likely locate the mother and child, ensure the parties are not in danger, and inform the man that this is a family law matter and that should retain a family lawyer.  If the roles were reversed, and the man left the home with the child, the police might act in a similar fashion….or, the man might find himself in a spot of trouble.  
 
                 Tip for New Fathers 
What if both spouses are new parents?  I would always advise a new father to take a parenting course.  I would do so because I think a parenting course would benefit any new parent; but I also recommend a parenting course because I think it would be essential in helping the father protect his parenting rights if nasty litigation were to ensue.  Of course, I would recommend a parenting course to a new mother.  However, I do not think such a course is nearly as crucial from a legal/tactical perspective. 
 

Please do not misconstrue my comments as misogynistic ravings.  I would say that I have an equal split between male and female clients.  I have great female clients and challenging female clients; the same can be said of my male clients.   But in short, I do believe that mothers continue to have a distinct advantage over fathers when it comes to custody battles—even in this day and age. 

Child Support–When Does My Obligation to Pay Child Support End? (Part 2)

 Continued from Part 1 

So you will recall from Part 1, that one’s child support obligation does not necessarily end when a child turns 18.  Nor does the obligation necessarily end once the adult-child has obtained one post-secondary degree, diploma or certificate.  
How about if the adult-child neither has nor wants anything to do with the ‘payor’ parent? Surely, the estranged parent should not be required to continue subsidizing the child’s ongoing education?  Surely, the parent should not have to pay ongoing Guideline table support?  Right? 
 

 Wrong.  
This issue, regrettably, rears its ugly head more often than one would think.  In the past, the Courts would sometimes side with the parent:  in the face of a unilateral repudiation of the parent-child relationship by the child,  a parent should not be required to continue paying support.   The law, however, has evolved so that this unilateral termination must be ‘egregious’ (i.e. conspicuously bad or offensive), and there is absolutely 100% no blame that can be placed on the parent’s shoulders.  More recent cases have even suggested that—given the ‘no-fault’ paradigm of family law in Ontario (actually in all of Canada)—a child’s conduct should not even enter into the equation.   Conduct is generally not considered a factor when it comes to awarding spousal support, then why should child support be any different? 
 
 Personally, I am not entirely convinced by this argument.  For that matter, I am not entirely convinced that ‘fault’ should not play some role when it comes to dealing with support issues, both child and spousal.  
 
Does it seem right that a spouse can cheat on his/her partner left, right and center during the relationship, run off with the next door neighbor, and still be entitled to spousal support?  Is it right that a child, now an adult, can tell a parent to ‘get lost, I want nothing to do with you, you are pond scum…but I still want your money’, and still be entitled to support?    
 
I do not think this fair and just.  But such is the law.  People pursue litigation with the belief that the law and the legal system equate with justice and fairness…….a common misconception… 
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Child Support–When Does My Child Support Obligation End? (Part 1)

Many people assume that a child support obligation would end when a child is no longer a child—i.e. when the child reaches the age of majority. 
An adult child could still be entitled to ongoing support if s/he is still considered a ‘child of the marriage’ as defined by the Divorce Act… 
 

“A child of the marriage” means a child of two spouses or former spouses, who, at the material time, a) is under the age of majority and who has not withdrawn from their charge, or b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life”.  
 
The ‘other cause’, more often than not,  is post-secondary education.  If an adult child is attending post-secondary studies, full time, this child will most likely be deemed  “a child of the marriage” and therefore entitled to some degree of support. 
 
It is important to distinguish between Guideline table support and Section 7 expenses.  Guideline table support is the contribution made by the non-primary parent to the primary parent towards basis day-to-day expenses: for example, food, clothing, a roof over the child’s head.  The amount is dictated by the non-primary parent’s income, generally without regard to the primary parent’s income[1]    Section 7 expenses—called Section 7 expenses because they are addressed in Section of the Child Support Guidelines—are above and beyond the table amount.  Examples of Section 7 expenses would be daycare, medical and dental expenses not covered by insurance or a plan, possibly both expenses related to the child’s education and extracurricular activities.  These expenses are shared by the parents proportionate to income. 
 
Post-secondary education expenses are considered as a Section 7 expense; however, the sharing of this expense is different.  The child is usually expected to contribute as well towards this expense, through grants, savings, income generated from part-time or summer employment, loans etc.  There is no hard and fast rule as to how much the child should contribute towards the cost of post-secondary education. Generally speaking, the better off the parents financially, the less expected from the child.  
 
In short, if the adult child resides at home and goes to his/her home university on a full time basis (part-time doesn’t cut it), the non-primary parent could be on the hook for both Guideline table support–at least for those months during which the child attends studies—and, as well, on the hook for a contribution towards the cost of these studies. 
 
So, child support does not necessarily end when a child reaches 18.  But surely, once a child has obtained his or her first post-secondary degree, diploma, certificate, that is it, that is all, right?  
 

  No longer.  The reality of our generation is that many undergraduate degrees will not guarantee much more than a job flipping burgers at McDonalds.  Often, further education is required to genuinely become self-sufficient.  The Courts, as reflected in recent decisions, appear to acknowledge this fact.  Whether or not a parent should contribution to further post-secondary expenses, depends on many factors, including but not limited to a) the parent’s financial circumstances, and b)  the parents expectations for the child.  For example, if the child’s parents are both doctors (or God forbid, lawyers), and the expectation was that ‘Junior’ was to follow in his or her parents’ footsteps, there is a good chance that a Court would require the parents to contribute towards the cost of the further post-secondary education.   
 
 
[1] Shared parenting arrangements are usually handled differently, and I address this topic elsewhere. 
 

Continued in Part 2 

The Matrimonial Home–Be Aware! (Part 2)

A quick recap from Part 1:  Under the Ontario Family Law Act, if you bring a residence into the marriage, one which is treated as the ‘matrimonial home’ as of the date of separation, you cannot deduct the date of marriage value of this home.  The whole value will be included when it comes to determining the equalization payment owing by one to the other. 
 

 If a person were contemplating marriage, and intends to bring into the marriage a previously owned home, one in which the couple will reside until death do they part, this might be a good reason to consider investing in a prenuptial agreement/marriage contract prior to tying the nuptial knot.  If you have made the mistake of bringing the home into the relationship, and the relationship is not working out, you might want to sell the home well prior to formally dissolving the relationship. 
 And yet another cautionary note about the ‘matrimonial home’…… Did you know that under Part 2 of the Family Law Act, Section 24 to be exact, a Court could order that one of the parties have temporary exclusive possession of the matrimonial, regardless of who owns the home?  So, for example, our hapless hero, poor, poor Jane brought the matrimonial home into the marriage—and as outlined in Part 1 of this blog, she already lost big time with respect to the home’s value—she could still be evicted from her home (temporarily, at any rate).  Jack would be allowed to stay and Jane would have to go.  Why would a Court make that decision?   There are several other factors but a big one has to do with the children: if the Court determined that Jack had been the primary caretaker of the children, and the interests of the children would be best served by allowing them to stay in the home with the primary caretaker, this result could happen. 
 In conclusion, many of the provisions of the Family Law Act are archaic, implemented originally to protect women:  women who stayed at home to be the happy homemakers, the primary caretakers for the children.  However, in this era of two income families (by golly, it is hard to make a go of it in this day and age with only one income stream) and income parity between the sexes (relatively speaking compared to before at any rate), perhaps the provisions dealing with the matrimonial home should be revisited.  
 
For that matter, why would the matrimonial home provisions of the Ontario Family Law Act only apply to married couples, as opposed to common-law couples as well? 
 
Well, for that matter, why do all the property provisions of the Ontario Family Law Act only apply to married couples?  
 
Definitely antiquated stuff, and not in keeping with the way our society has been evolving. 

The Matrimonial Home–Be Aware! (Part 1)

The ‘matrimonial home’ is treated differently than other types of property under the Family Law Act.  Indeed, the matrimonial home is accorded its own special place—Part II of the Family Law Act.    
 
A Matrimonial Home is defined as a property which at the time of separation was ‘ordinarily occupied by the person and his or her spouse as their family residence’.  It should be noted that you could possibly have more than one matrimonial home.  For example, if you owned a cottage as well, one that was enjoyed by the family on a regular and frequent basis, both home and cottage could be considered matrimonial homes, thereby falling under the provisions of Part II of the Family Law Act. 
 
Is the definition of the matrimonial home important? 
 
You bet it is. 
 

Normally, when a married couple separates, the value of “the property of the marriage” is to be divided equally.  ‘Property of the marriage’= 1) your assets/property minus your debts from the date of marriage to the date of separation; 2) minus property (and debts) that you brought into the marriage (pre-marital deductions); 3) minus any ‘excluded’ property you received during the course of the marriage (excluded property could be a gift from a  person other than your spouse or an inheritance).  
 
Once the above calculations are performed, you arrive at an amount referred to as your ‘Net Family Property’ (NFP).  Under Part 1 of the Family Law Act, the parties’ net family properties need to be ‘equalized’; the party with the greater NFP value with have to pay the other an ‘equalization payment’ so that they end up with the same NFP.  If for example, Dick has $20,000 NFP and Jane has $10,000 NFP, Dick will have to pay Jane an equalization payment of $5,000.00, so that they both end up with $15,000.00. 
 
Beware:  As mentioned, the value of property owned prior to getting married is not included in the calculation.  So, for example, if Jane had an investment that was worth $10,000.00 at the date of marriage and this investment had grown to $15,000.00 at the date of separation, only the $5,000.00 increase in value would go on Jane’s ‘side of the ledger’, so to speak.  The initial $10,000.00 investment would be considered a ‘pre-marital deduction’. 
 
THIS PRINCIPLE DOES NOT APPLY TO THE ‘MATRIMONIAL HOME’! 
 
If Jane owned a home prior to marrying Dick which at the date of marriage was worth $300,000.00, the parties lived in this home until they separated, and the home was worth $350,000.00 at the date of separation, the whole value of the home, all $350,000.00 worth, would go on Jane’s side of the ledger.  
 
Ouch.  Poor Jane. 
 
Remember I said that gifts from third parties or inheritances were considered ‘excluded property’ and as such would not be added to the value of a person’s NFP….. 
 
Let’s say that Jane received a $50,000.00 inheritance from her recently deceased favorite Aunty during the course of the marriage.  She takes the $50,000 and places it in an investment.  The $50,000.00 is still considered excluded property; so far, so good for Jane.  But, then she takes that $50,000.00 and uses it for renovations to the matrimonial home.  The value of the home is now worth $400,000.00.  She already cannot deduct the value of her home as of the date of marriage; and now she cannot deduct the $50,000 inheritance she received from her Aunt during the marriage. 
 
Ouch, poor, poor, Jane, indeed.  
 
(To be continued….) 

Grandparent’s Rights

Grandparents can have rights with respect to the issues of custody and access of their grandchild. (For that matter, under the Ontario Children’s Law Reform Act, any person—not just mom or dad—can apply to a court for an order respecting custody of or access to a child.) 

More and more frequently, grandparents are bringing court applications seeking access to, or even custody of, a grandchild. A common scenario: the grandparents and the parents have a dispute, and as a consequence, the parents restrict their parents’ access to the grandchild. If you are a grandparent who feels it has become necessary to bring a court proceeding in an attempt to see your grandchild, keep in mind the following general principles: 

  • At the end of the day, the court’s decision will be based on whether or not grandparent access would be in the child’s best interests. The issue is not about the needs or the wishes of the grandparent, or the needs or the wishes of the parent for that matter. It all comes down to what is best for the child in question. 
  • Parent’s rights usurp grandparent rights. A duty to create a grandparent-grandchild relationship lies with the child’s parents. The failure to do so does not warrant judicial intervention, especially in circumstances where the immediate family is functioning well and the child’s best interests are being assiduously nurtured by dedicated parents. 
     
     
  • When determining whether it is in the child’s best interests to have access to the grandparents, the courts will look at what type of relationship historically existed between the grandparents and the grandchild. Generally speaking, the more time spent between grandparent and grandchild, and as a corollary, the closer the ties between them, the more likely the Court is to order access. 
     
     
  • In the case of real conflict and hostility between parents and grandparents, the Court will rarely find that the child’s best interests are served by granting access to the grandparents. 

 
In short, a grandparent seeking access (or custody) through the judicial system has a bit of an uphill battle; which is not to say that the battle cannot be won. If the Court determines that a positive, meaningful relationship has existed between a grandparent and a child and that the parent in restricting access, is acting arbitrarily, without justification, perhaps even vindictively, a Court may well intervene to reestablish the relationship between child and grandparent.