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Division of Property and Support. Chapter 14. Family Property. Historically in English common law, women could not own property. Husbands were always in complete control of family property , such as a house or farm.
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Division of Property and Support Chapter 14
Family Property • Historically in English common law, women could not own property. Husbands were always in complete control of family property, such as a house or farm. • Furthermore, in traditional divorces the husband and wife walked away from the marriage with whatever they paid for. • This process was unfair to many women who maintained domestic roles during their marriages and did not work much outside of the home. • If women did work, their husbands still earned more money, as women were not paid equally.
The Family Law Act • The first significant legislation to recognize marriage as an equal partnership was the Family Law Reform Act, which led to the Family Law Act. • Thefirst Family Law Act was passed in the province of Ontario in 1986. • Legally married spouses, including same-sex couples, are now entitled to their fair share of everything valuable that was acquired during the marriage.
Property & Payments • Equalization divides the value of property equally between divorcing spouses. • Common property items include property such as a house or apartment, as well as financial accounts, business interests, furniture, appliances, and other personal property. • Debts must also be divided equally if they belong to both spouses. This includes mortgages, loans, and credit card balances. • Net family property refers to the net worth of each individual spouse. • The spouse who has a greater net worth is usually ordered to provide the other spouse with an equalization payment.
Calculating Payments • The following six steps are used to calculate family property and equalization payments. • Step 1 – the spouses list their assets (joint and separate) on the date of separation. • Step 2 – individual gifts and inheritances are removed or subtracted from the asset list. • Step 3 – total debts are also subtracted. • Step 4 – value of assets (without debts) are listed on the date of marriage. • Step 5 – the amount from Step 4 is subtracted from the amount in Step 3 to determine each spouse’s net family worth. • Step 6 – the lower net worth is deducted from the higher one, and the difference is divided by two to determine how much the equalization payment will be.
Unequal Division of Property • There are certain situations in which marital property can be distributed unequally. • Length of marriage: if the length of the marriage is very brief and one spouse’s personal assets are significantly higher than the other’s, it may be unfair to divide everything equally. • Date when an asset was acquired: if a spouse purchased something just before the separation and the other spouse never had time to enjoy it, the spouse who purchased it may get to keep it. • Gifts and inheritances: personal items that are meant for an individual such an inheritance; it would be unfair to force a spouse to split a gift or inheritance that was specifically meant for that spouse only.
The Matrimonial Home • The home that the spouses use regularly during their marriage is the matrimonial home. • This may be a house, condominium, mobile home, or almost any other dwelling owned by one or both spouses. • Each spouse has an equal right to live in the matrimonial home and to not be forced out. • In a separation, one spouse may be granted sole possession of the home for a certain period. • During the divorce, the matrimonial home’s value is usually divided between the spouses.
Principles of Property Division • The property is to be divided equally between spouses unless it would result in an injustice or inequity. • Contributions of a spouse who was mostly or wholly responsible for managing the home and taking care of the children must be recognized by the courts. • Each spouse’s contributions must be legally recognized, including money earned and the acquisition of property and assets. ***If one spouse dies, the other spouse usually receives the property. If there is no will, the surviving spouse may apply to the court.
Common Law Relationships • Also known as cohabitation, the act of living together in an intimate relationship without being married is a common law relationship. • In Canada, the law provides many of the same protections (but not all) for common law couples that exist for those who are legally married. • Over the past several years, cohabitations have become much more common as many couples are choosing to live together without being formally married.
Common Law—Property • When a married couple separates, they have an automatic right to divide property equally. • This does not apply to common law couples. • In a common law relationship, the property belongs to the person who paid for it. • If the couple purchased something together, it will be divided equally if they separate, or it can be divided based on how much each of them contributed toward the purchase. • If one common law partner contributes toward another’s success, the contributing partner may be entitled to further property rights.
Manitoba’s Law • In 2004, the province of Manitoba passed the Common Law Partners Property Act, which states that the rights of common law and married couples are similar after a certain period of time: • a common law couple who live together for 3 years • a common law couple who live together for 1 year and have a child together • This entitles common law couples to equal division of property and assets, like married couples.
Spousal Support • Financial assistance provided by one spouse to another following separation is known as spousal support or maintenance. • This type of support is intended to assist a former spouse until he or she becomes self-sufficient. • Every case is decided on its own merits. • Spousal support is also meant to relieve any economic hardship one of the spouses experiences from the marriage breakdown. • There are various factors used to determine how much spousal support should be given and for how long.
Spousal Support Factors • The following factors are considered when determining spousal support: • assets and income of each spouse, including current and future earning ability. • ability of each spouse to be self-sufficient. • ability of each spouse to provide support to the other spouse (if necessary). • age and health of each spouse. • length of time the spouses were together. • contributions of each spouse to the home and family. • length of time a spouse may need to acquire or further improve his or her employability skills.
Length of Support • Spousal support is often limited to a short period of time for short-term relationships that do not involve children, or if the couple is young. • This type of support may go on indefinitely in some cases, but is not meant to go on forever. • Either spouse may apply for the support order to be reviewed. • A review may increase, decrease, cancel, or simply continue the support order. • If circumstances change, so may the support order (e.g. the supporting spouse makes more money; the spouse receiving support gets a job).
Child Support • Parents have a responsibility to provide for their children up to the point of adulthood, whether they remain married or separate. • The federal government and each province have child support guidelines to determine how much financial support a non-custodial parent must provide for his or her children. • Every province uses a table that reflects the non-custodial parent’s annual income and the number of children that must receive support. • The higher the income and/or the number of children, the higher the child support.
Exceptions • There are some possible exceptions to the support payment tables: • If the payments cause undue or excessive financial hardship for the paying parent, the amount may be adjusted. • If there is joint custody. • If the child is 18 years old or older, the tables become a starting point, but the amount could be adjusted to pay less or more, depending on the situation. • If the parent’s annual income exceeds $150,000. Most Canadians do not earn this type of salary. These cases are decided individually.
Enforcement • There are various options available to different levels of government to enforce child support payments. • The federal government can deduct federal money payable to the parent or refuse to issue them important documents, like a passport. • Provincial governments can take further action, such as garnishing the parent’s wages. • Alberta and Ontario are the first two provinces to launch websites that list photos and personal information on parents who fail to make their child support payments in an effort to humiliate them into paying.
Domestic Contracts • A domestic contract is an agreement between partners that outlines their specific rights and obligations in a relationship. • There are 3 main types of domestic contracts: • Cohabitation agreements • Marriage contracts • Separation agreements • Domestic contracts have become more popular in recent years as many couples seize the opportunity to communicate and record their concerns.
Types of Domestic Contracts Cohabitation Agreement • A contract between two unmarried people who live together in a common law relationship. Marriage Contract • A contract between two married people, or a couple that plan to marry (commonly referred to as a pre-nup, but that term has no legal effect). Separation Agreement • A contract between a couple that is separating; usually involves a division of property.
Terminating a Domestic Contract • A domestic contract may be terminated • by mutual agreement between the two parties. • if there is a time limit on the contract that expires. • A contract may also be reviewed and amended every few years to reflect changes in the lives of the couple (e.g. children are born, new property is bought or sold, a career or job change, more money is made by one person).
