Why what you brought into the marriage matters - BlogBite (23)

Here is a hypothetical scenario:

• You are married and now separated,
• you are completing a Financial Statement,
• you need to make a list of what you owned and what you owed on the date of marriage,
• you are not quite sure why:
• and you are too embarrassed to ask your lawyer for another explanation; or
• you are representing yourself, you do not understand the reason but you have seen the Financial Statement form and you know you have to do that.

Ontario's Family Law Act provides a formula for dealing with assets and debts when married spouses separate. Some people refer to this as "property division" - in fact, the process based on the formula, is called "equalization".

In Ontario, in the calculation of their "net worth" for family law purposes, called Net Family Property, deceive credit for the value of their assets at marriage minus their debts. 

That is why you are preparing that list.....

UPDATE - January, 2018

We are pleased to let you know that our Etsy shop is now OPEN!

Visit it here: SELFREP SUPPORT

In the shop, we make available to you Manuals (E-books) on various topics, to assist you in representing yourself before Ontario's family law Courts.

So far, we have Manuals on:

• preparing an effective Financial Statement (both long-form and short-form); 
• preparing an effective Affidavit; and
• the basics of service and filing...

MORE MANUALS TO COME! 

"Why does it matter what I had when we married?" - BlogBite

BlogBite (12)

Question: "I was married and I am now separated. Someone told me that it is important for me to show what I had when I married my wife. Why does this matter?"

Answer: Ontario's Family Law Act provides a mechanism for the sharing, on separation, of the spouses' assets and debts, by value. The Act contemplates the sharing by the spouses of the increase in their net worths (based on a formula) between the date of marriage and the date of separation. In other words, a separated spouse gets credit for the value of their assets (less liabilities) at marriage. This is why it's important for you to establish that value.

Do you have any further questions? Give us a call....

Spousal RRSPs - mine or hers? - BlogBite

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Question: during the marriage, I contributed to my Wife's RRSP - on separation, is it mine or hers?

Answer: It's hers. That being said, if you were married, on separation you will receive one-half of the notional value of the RRSP through the equalization mechanism (the division of assets in Ontario). The RRSP will be one of the assets listed as part of her net family property and will be equalized with you.

Do you still have questions? Please call us for a free 30 minute consultation.

Inheritances and Ontario family law

Equalization of net family property is one area of family law where inheritances come into play.

Generally speaking, an inheritance received by a party during the course of the marriage is "excluded" property under Ontario's Family Law Act and such an inheritance is not "shareable" with the other spouse.

There are a number of issues to keep in mind in connection with the above, general statement. The list below is not exhaustive but, rather, it is included to show you how complex this area of family law can be and that you would be well-advised to seek legal advice about it:

1. it matters what the recipient did with the inheritance - for example, if the money was spent on travel for the family, it cannot be claimed as an exclusion..

2. picking up on point 1. - can the whole or any portion of the inheritance be traced to an asset existing at the date of separation/valuation? - if only a portion can be traced, only that portion can be excluded..

3. is the inheritance mingled with other assets and can it be "spliced out"?

4. was the inheritance used, in any way, for the matrimonial home? - this is an important issue and you should seek advice on it...

5. income from an inheritance is treated in a unique way in Ontario  - find out how by contacting a lawyer....

Once again, the receipt of an inheritance during the marriage can impact significantly on the calculation of an equalizing payment on separation/valuation so do not "self-prescribe" in this complex area of family law...seek input from a family law practitioner in your area!

Stunning purple shutters in Alsace, France, via travelblog.org

Pensions in Family Law

Pensions are relevant in family law for a number of reasons. These include the issues of income and equalization.

On the income front, a pension in pay is likely an income source for the purposes of calculating support obligations. In other words, individuals receiving a pension may still be obligated to make support payments. Retirement does not signal an automatic end to support payments.

Pensions are also assets which are subject to equalization under the Family Law Act. They have a value for the purposes of one's net family property and we use actuaries (pension valuators) to establish that value. Just like with respect to all other assets subject to equalization, a pension valuator establishes any value the pension had at the date of marriage (for which you get credit), as well as the value of the pension at the valuation date.

In some family law cases, a pension can be both an income source and an asset subject to equalization, which gives rise to the issue of "double dipping". You are encouraged to seek advice on this very interesting but somewhat tricky area of family law.

"Legal Separation"??

The term “legal separation” is often misused and frankly, misunderstood. I often have individuals calling me because, as they say, they want "a legal separation".....

Whether a couple is separated or not is a question of fact. It is sufficient for one party to give effect to a separation, by their actions. The other side does not have to be in agreement with the separation for it to occur.

Contrary to a prevailing notion, a separation of a couple does not have to be registered anywhere or legally confirmed in writing in order to take effect.

In Ontario, the date of separation is relevant to at least two issues, namely, the divorce and the equalization of net family property (property division).

For more information, I encourage you to seek legal advice from someone who routinely practices in this area of the law.

Work by Gerard Dubois

What is "equalization"

Equalization is a formula, set out in Ontario's Family Law Act, which we use to effect property division between divorcing spouses (the formula applies only to parties who are married to each other).

I used the phrase "property division" because that generally helps a client understand where this concept is used among issues common to a matrimonial case. Technically, however, the phrase is incorrect in describing what happens in Ontario: the Family Law Act envisions not the actual division of property (each party is entitled to 2 chairs out of 4) but the sharing of "value" - the spouses share with each other the increase in their respective net worths between the date of marriage and the date of separation. This means that the spouse with a greater net family property (see explanation elsewhere in this blog) has to give the other spouse one-half of the difference between them, with the effect that their net family properties are equalized.

Using the simplest example possible, if a husband and a wife were separated and the only asset between them was a pension, which resulted from the husband's employment, then the value of that pension would be considered his net family property. If the pension has the value of $100,000, and the wife has no assets of any kind at separation, then the husband would have to pay to her $50,000 in an equalization payment. At the end of this process, each would end up with $50,000.

There are other important elements which fit into the equalization formula and you will find them further explained in other posts in this blog (eg: "excluded property" and "date of marriage deductions").