Family Law (34 questions)

Question 1

Common law parter

Answer 1

According to the ITA, two people are common-law partners if they are of the same or the opposite sex and either:

• have lived together in a conjugal relationship for at least a 12 month period.
• they live together in a conjugal relationship and have a child together.

Separation does not terminate a common-law relationship unless the couple separates for at least 90 days because of a breakdown in their relationship.

Question 2

Claiming childcare expenses

Answer 2

In most cases where there are two parents, only the parent with the lower net income can claim a deduction for childcare expenses.

The only time the supporting person with the higher net income can claim the childcare expenses is if the lower-income supporting person is:

• separated
• confined to wheelchair or bed
• in prison; or
• enrolled at a secondary school or other designated educational institute either part time or full time.

Question 3

Divorce Act

Answer 3

The dissolution of a legal marriage is governed by the Federal Divorce Act. The Divorce Act gives the provinces the authority to define their own practices and procedures with respect to divorce matters, as well as the authority to hear corollary relief proceedings that cover child custody orders and child and spousal support orders at they relate to a divorce.

A married individual can file for divorce any time.

The only ground for divorce is a marriage breakdown. A marriage breakdown is a breakdown of a relationship between spouses, which may be proved by any of the following:

• spouses must be living separate and apart at the commencement of divorce proceedings and have been living separate and apart for at least one year by the time the proceedings are finally determined by the court.
• adultery by the respondent; or
• physical or mental cruelty by the respondent.

There are no legal formalities that have to be completed when the couple decides to separate, and they do not have to apply to the provincial court for approval for their separation.

Legal separation refers to the fact that both spouses have voluntarily signed a domestic contract or separation agreement that specifies the terms of their separation, including any property division and child support.

Question 4

Ascendant

Answer 4

Is a relative from whom an individual is a lineal descendant. Parents and grandparents are an individuals ascendant relatives. According to family law legislation of most provinces, an individual has a legal obligation to support his parents to the extent that the are unable to provide for themselves, especially if the parent provided child care or support to that individual as he was growing up.

Question 5

Descendant

Answer 5

A descendant is an individual’s offspring, including his biological or adopted children and his children from previous relationships. It also includes grandchildren and great grandchildren. In most cases, and individual has a financial obligation for his minor children. An individual may also choose to assume financial responsibility for a minor grandchild or a great grandchild, but this responsibility is typically not mandated by legislation, unless the individual has provided a past pattern of support.
An individual’s collateral relatives include those people who have descended from a common ancestor, but in a different line. Collateral relatives include brothers and sisters, nieces and nephews and aunts and uncles. Normally, an individual does not have any statutory obligation to support a collateral relative.

Question 6

Child Support

Answer 6

The federal child support guidelines consider the following factors when determining the amount of support that the paying, non-custodial parent should contribute towards his children:

• income of the non custodial parent when determining the amount of the basic award
• the income level of both parents when determining how extra expenses will be shared
• number children to be supported
• the type of custody arrangements, and the roles of both parents if they are sharing custody of the children; and
• the province of residence, so that variations in provincial taxes can be taken into account.

The Federal Child Support Guidelines only consider the income of the non-custodial parent when determining the amount of the basic award. The income level of the custodial parent is only considered, along with the non custodial parent, when determining how extra expenses are to be shared.

Question 7

Federal child support guidelines

Answer 7

are guidelines that are used to calculate child support when a couple divorce. The federal child support guidelines include different rates for each province and territory to take into account the different provincial tax rates. The version of the federal child support guidelines to use is those for the province of residence of the non-custodial parent who is pay the child support.

When common-law partners separate and until a separated married couple divorce, the provincial legislation, which may include child support guidelines similar to the Federal ones, would be used to calculate child support.

Question 8

Shared custody arrangement

Answer 8

is an arrangement where a child lives at least 40% of the time with each parent during the year.

With shared custody arrangement, each parent determines the amount of basic support that he/she has to pay based upon his/her income.

The parent with the obligation to pay the greater amount of the basic support would pay based upon his/her income.

The parent with the obligation to pay the greater amount of basic support would the other parent the difference.

Question 9

Income tax implication for child support and spousal support

Answer 9

For all written child support agreements or court orders that are made after April 30, 1997, or all such agreements that were modified after that date, the child support payments are not taxable for the custodial parent, and they are not deductible for the paying parent.

However, regular spousal support payments must be included by the recipient in taxable income and may be deducted by the paying spouse.

Question 10

Enforcing child support payments

Answer 10

In most provinces, the enforcement of child support and spousal support orders for parents within the province is governed by a special Maintenance Enforcement Act, which empowers government agencies to use a variety of methods to enforce the support orders. However, these Maintenance Enforcement Acts only apply to enforcement within that particular province.

The provinces also have a Reciprocal Enforcement Acts, which specify their arrangements with other provinces and jurisdictions to reciprocally enforce maintenance orders made in those jurisdictions. Reciprocating jurisdictions include all of the provinces, man of the United States, and the United Kingdom, and many other countries.

Question 11

Dependent

The family law legislation of some provinces require a supported ex-spouse to strive for self-sufficiency after separation or divorce. However, the courts will consider a long list of factors when determining the actual support amount, including:…

Answer 11

A dependent is a person who by reason of age, mental or physical infirmity is unable to provide himself with the necessities of life and relies upon another for financial support.

The family law legislation of some provinces require a supported ex-spouse to strive for self-sufficiency after separation or divorce. However, the courts will consider a long list of factors when determining the actual support amount, including:

• the standard of living enjoyed by both spouses during and after their relationship
• the length of financial dependancy during the marriage
• the financial consequence realized by a spouse arising from the care of a child in the relationship.
• the contribution made by the dependent spouse to the realization of the career potential of the supporting spouse.

Question 12

Varying or contesting court ordered child/spousal support

Answer 12

At any time, either former spouse can apply for a variation to an existing spousal or child support order made under the Divorce Act.

However, before such a variation will be granted. the court must be convinced that there has been a substantial change in a material fact related to the condition, means, needs, or other circumstances of either spouse since the order was first made. The court will not allow a spouse to go back and reargue an existing order simply because she did not agree with the court’s original decision.

Some of the common material facts that may justify a variation include:

• one the individuals requiring support has developed unanticipated medial expenses or other extraordinary expenses.
• the supporting spouse has realized a substantial increase in income, in which case the children may have a right to share in that increase under the Federal Child Support Guidelines; or
• inflation has seriously eroded the purchasing power of the original fixed award amount.

Question 13

Which authority makes order to transfer assets

Answer 13

Any order to transfer assets will be made under the authority of the Provincial Matrimonial property legislation, not divorce act.

Question 14

Divorce act

Answer 14

The divorce act gives the court broad discretion to make spousal support awards that consist of a lump sum and/or periodic payments. In addition, the court can impose conditions to secure the payments against certain assets, such as a house or car to be used by the supported spouse.

Question 15

Parental support payments

Answer 15

Most provinces deal with the issue of parental support with legislation that imposes a legal obligation on grown children to support their parents if their parents are unable to support themselves. The legislation varies with each province, so uniform rules and levels of support do not exist.

The ITA does not specifically address the issue of parental support. Support payments made by the child to his parent are considered to be a gift, so they are not taxable to the parent and are not deductible to the child.

Question 16

Support payments after death of paying spouse

Answer 16

Usually, and individual is free to direct the disposition of his estate after his death in any manner that he sees fit through his Will. However, his testamentary freedom may be restricted if he dies and leaves behind dependents. If he fails to provide for those dependents through his Will, they can apply for relief from his estate under provincial dependent’s relief legislation.

The court has broad discretion in making an award under this legislation, and could order the estate to continue payments, provide a lump sum to be held in trust, or even grant possession of the deceased’s property to the dependants indefinitely or for a specific period of time.

Question 17

deferred community of property regime

Answer 17

spouses are generally free to own and manage their own property during marriage.

Marriage does not give one spouse an automatic interest in the existing or new property of the other spouse. Each spouse is still free to own and control assets that are registered in his or her own name, and there is no requirement to register property in joint tenancy.

Question 18

Matrimonial home

Answer 18

For the purpose of provincial family property legislation, the matrimonial home could be almost any type of dwelling, including a townhouse, a condo, mobile home, or even a bot that was the family’s primary home.

However, if the home if part of a larger property, such as a farmhouse and the surrounding farmland, only the portion of the property that is actually used as a residence qualifies as the matrimonial home.

It is possible for a family to have more than one matrimonial home (ie: main residence and cottage).

In all provinces, both spouses automatically have equal right of possession of the matrimonial home. This means that both spouses have the right to live in, use and otherwise enjoy the matrimonial home, even if the legal title rests with one spouse only. In all provinces, except Newfoundland, this equal right of possession of the matrimonial home does not mean that they are both automatically entitled to share legal ownership of the home.

If one spouse purchases a home during their marriage to serve as the family home, he can retain sole ownership of that home throughout the marriage, but his spouse will have equal right of possession of that home during their marriage. The home will form part of their community property, which may be subject to division upon marriage breakdown.

Question 19

Resulting trust

Answer 19

a trust that is formed when one partner acquires and holds title property where it was the intention of both parties that the titleholder was really holding his partner’s share in trust. A partner can prove that a resulting trust exists if:

• the couple had expressed their common intention to have one partner hold property in trust, either in writing or verbally, or even by their conduct.
• the partner that does not hold title to the property can show that she made a direct contribution, via money or money’s worth, to the acquisition of that property.

Question 20

Constructive Trust

Answer 20

is a trust that can be imposed against the titleholder without any evidence of the titleholder’s intention to hold the property in trust. Four elements must be present in order to form a constructive trust:

• the contributions of the non-titleholder must have enriched the legal titleholder, and these contributions can take the form of money, money’s worth, or labour.
• the enrichment of the legal titleholder resulted from some deprivation on the part of the non-titleholder
• there was no legal justification for this enrichment; and
• there is a direct connection between the increases in the value of the titleholder’s asset base as a result of the direct or indirect contributions of the non-titleholder (although the courts have often dismissed the requirement for a casual connection.)

Question 21

Separation of pension benefits at marriage breakdown

Answer 21

Pension benefits or the pension credits that entitle a pension plan member to future benefits are considered to be personal property and they are subject to division according to provincial matrimonial property legislation.

For vested members of a DB plan, the administrator of the pension plan must determine the commuted value of the pension entitlement that was accumulated from the time that the plan member was entered into the spousal relationship until the time that their marriage broke down, and this is the amount that would be subject to division.

If an individual is not yet a vested member of the pension plan, the amount that is subject to division under the provincial matrimonial property legislation will be the sum of the member’s contributions to the plan plus interest.

Question 22

Pension legislation - breakdown of marriage

Answer 22

In most provinces, common law partners do not have a statutory right under provincial family property legislation to share in the community property of their relationship. Thus, according to provincial family property legislation, common law partners do not have a statutory right to share in their partner’s pension benefits upon the breakdown of their relationship.

HOWEVER, the pension legislation in most provinces gives opposite sex common law partners the statutory right to share in pension benefits upon relationship breakdown. In some provinces, this is extended to sam-sex partners. Pension legislation usually limits the division of total pension entitlements upon relationship breakdown to a maximum of 50% of the commuted value of the pension benefits accrued during the relationship.

Question 23

Pension legislation - death of plan member, common law spouse

Answer 23

Under the intestacy legislation of most provinces, common law partners do not have the right to share in estate of their deceased partner. HOWEVER, the pension legislation in all provinces includes the concept of opposite sex, common law partners in their definition of spouse for the purpose of determining survivor’s benefits under pension plans. In a few provinces, this has now been extended to same sex, common-law partners.

Question 24

Marriage Breakdown - pension benefit entitlements

Answer 24

Pension benefits or the pension credits that entitle a pension plan member to future benefits are considered to be personal property and they are subject to division according to provincial matrimonial legislation.

However, pension plans are designed to provide retirement incomes. Even if a benefit becomes transferrable to a non-member spouse as a result of marriage breakdown, most pension legislation specifies that the transferred amount must be used to provide retirement income. The payment options to the non member spouse include:

• payment of a company pension upon retirement age
• lump sum transfer to the non-member’s locked in RSP account
• the transfer of pension credits to the RPP of the non-member if she belongs to an RPP at her own place of employment; and
• the purchase of a deferred annuity.

Question 25

Division of CPP credits at marriage breakdown

Answer 25

Federal legislation, including CPP legislation, recognizes both opposite sex, common-law partners and same sex common law partners, as having the same rights and obligations as spouses.

The division of CPP pension credits upon relationship breakdown is mandatory and is based upon the length of the relationship.

This division will take place once the Minister receives a notice of divorce, a judgement of nullity, or upon the Minister’s approval of an application made by one of the spouses or common-law partners if the spouses or common law partners have been living separate for a period of at least one year.

Question 26

Transfer of capital property to former spouse - is it considered a deemed disposition triggering capital gain/loss?

Answer 26

No

The ITA automatically provides for a taxpayer to roll over capital property to a spouse/common-law parter or to a qualifying spouse/common law partner trust, as long as both parties reside in Canada. This automatic rollover extends to former spouses or former common-law partners, as long as the transfer is done in accordance with a court order or separation agreement as a result of marriage breakdown. This means that the taxpayer does not have to realize a capital gain or loss at the time of transfer unless he chooses to do so.

Question 27

Attribution rules

Answer 27

Unless certain conditions were met to suspend the attribution rules, if you were to transfer property to a spouse/common law, either directly or through a trust in which a spouse/commonlaw is beneficially interested:

• any first generation income or loss from the transferred or loaned property substituted for it will be attributed to you
• any taxable capital gains and allowance capital losses from the transferred or loaned property or any property substituted for it would be attributed to you
• any second and subsequent generation income or loss from the transferred or loaned property or any property substituted would be attributed to the receiving spouse.

Income from property is interest, dividends, rental income, and passive business income earned by a specified member of a partnership.

Loss from property is rental losses and business losses incurred by a specified member of a partnership.

The spousal income attribution rules do not apply to property income during periods when spouses/common laws are living separate and apart due to marriage breakdown.

The spousal income rules continue to attributed capital gains during periods of separation, unless both spouses elect that these income attribution rules will not apply.

Once a divorce is finalized, all of the income attribution rules cease to apply.

Once common-law partners have separated for more then 90 days, all of the income attribution rules cease to apply.

Question 28

Marriage contracts/pre-nups, how do they differ from separation agreements

Answer 28

Marriage contracts and separation agreements are both types of domestic contracts executed under common law that can be used to specify what will happen when a relationship breaks down.

Marriage contracts can deal with:

• ownership and division of property
• child and spousal support obligations
• the right to direct the education and moral training of children of the relationship
• the division of household duties; and
• other matters that relate to the settlement of affairs to the relationship.

Separation agreements can deal with the same matters, plus the can deal with the issue of custody and access to children of the relationship.

The courts can overrule the terms of a domestic contract if it feels the agreed-upon child support is inadequate. Furthermore, the courts are more likely to accept the terms of a separation agreement over the terms of a marriage contract because, at the time, bother spouses will have a better idea of their needs and resources.