Donald R. McLeod Law Corporation
What Law deals with Custody and Access ?
If the spouses were legally married, then both the Federal Divorce Act and the Provincial Family Relations Act allow child custody and access to be dealt with.
If the parties were not legally married then the Federal Divorce Act does not apply and the parties must utilize the Provincial Family Relations Act.
What is divorce ?
Divorce is the legal means whereby two married people (of opposite or the same sex) formally end their marriage by the judgment of the court.
In Canada, divorce itself is governed by a federal law, the Divorce Act. The mechanics of how the Divorce Act is applied are dealt with the Supreme Court Family Rules and all divorces must take place in a court of general jurisdiction, which in British Columbia is the British Columbia Supreme Court.
What is legal separation ?
In British Columbia, the concept of legally separated as most people use it does not exist. You are either married, living together, or living separate and apart. A court does not give you status as “legally separated”. Your union can be broken by a court granting you a Divorce Order, or by obtaining a declaration from the court that you and your spouse have no reasonable prospect of reconciliation, or by making a separation agreement.
What is Common Law Marriage ?
Many people call living together a “common law marriage”. In fact, nowhere in Canada is there common law marriage. The distinction is important because in some important respects, the law treats people who are actually married differently that those who are living together in a situation resembling marriage.
An actual common law marriage is really a marriage according to habit or custom, as opposed to one sanctioned by a religious body or by a specific statute. It is however a marriage, legally binding and recognized as a marriage in some jurisdictions; there may have been a ceremony or not, but the marriage is not entered into a civil registry or religious body records. In those jurisdictions where it is recognized, it is legally binding, imposes marriage obligations on the spouses, and the individuals must get divorced before marrying again; if they don’t they are in a bigamous situation.
In some jurisdictions without true common-law marriages, the term “common-law marriage” is used as a synonym for a relationship that resembles marriage, without actually being a marriage.
Those jurisdictions that recognize common law marriages generally require three things:
- An agreement to be married. The spouses-to-be must announce to each other that they are married, usually from the moment of the announcement forward. In addition to the following factors, the agreement to be married must be prove
- The spouses must actually live together and behave while living together as if they were married.
- The spouses must publically and consistently hold themselves out as married; they can do so by telling other people they are married; filing joint tax returns; declare themselves married on applications and various documents, etc.
What Are The Grounds For Divorce ?
In Canada there is only one ground for divorce, breakdown of the marriage.
Breakdown of the marriage is established only by the spouses living separate and apart for at least a year immediately before the divorce order is made, or by one of the spouses committing adultery or treating the other spouse with intolerable physical or mental cruelty.
WHEN CAN I GET DIVORCED ?
While a divorce proceeding can be commenced before the year has expired, and while the other issues that usually arise in a divorce can be dealt with, the actual divorce order itself can’t be made for a year if the grounds are separation.
If the grounds are adultery or cruelty, then if the spouse can prove that adultery or cruelty, the divorce order can be made before a year has expired.
In Custody & Access, is there a difference between the Divorce Act and the Family Law Act ?
The considerations that the court must take into account in deciding where and with whom the children will live are similar in both acts but not identical.
In today’s modern world, many people prefer to avoid the terms “custody” and “access”, and talk about “parenting”. The Divorce Act is a law made by the Parliament of Canada, while the Family Law Act is a BC Provincial law. The Family Law Act deals extensively with the rights of children and the obligations of both parents to maintain meaningful contact with their children. It deals with “parenting” and avoids “custody” and “access”. The Divorce Act still maintains concepts of “custody” and “access”. The differences between the two Acts and how the courts deal with each (and even which courts in BC can deal with either Act is a complex subject and should be discussed with a lawyer.
It may be that the children will spend half their time with each parent, or may spend the majority of time with one parent and minority of their time with the other parent. Regardless, when the children are with one of the parents, that parent is responsible for the children.
What is Guardianship ?
The term “guardianship” is often heard; that is also a term that is falling into disuse in favour of the term “parenting”.
The older term “guardianship” really didn’t mean a lot more than deciding things such as where the children would go to school, what religious instruction they would receive, and the day to day issues that must be decided in a child’s life. Also, the person holding guardianship handles any financial affairs of the children. The other, non-guardian, parent normally has a right to be informed of all major decisions affecting the child, and to be kept apprised of the children’s progress in school, of who their physicians, dentists, counselors, and other advisors may be and to have access to the children’s records. The non-guardian parent usually has a right to challenge any decisions he or she disagrees with by going to court and having a judge decide.
Does each parent have a right to spend time with the children ?
The modern trend is to ensure that each parent has as much contact with the children as is practically possible. The law says as much contact as is in the children’s best interest is what the courts should order. It’s not so much the parent’s right to have the child, but the right of the child to know, be guided by and spend time with each parent.
In practice, in most cases it works out that the parents are given joint custody and joint guardianship and they spend as much time with each parent as the court thinks is appropriate. Sometimes that is half-time with each parent, or close to it. Sometimes it’s a week-on, week-off, and sometimes it’s unequal time, such as weekdays with one parent and weekends with the other. The ways in which time sharing is accomplished is virtually limitless.
Can the parents decide how to divide the childrens’ time with the parents ?
Broadly speaking the parents are free to decide between themselves as to how much time the children will spend with each other and it is always better if they can come to an agreement rather than have the court impose a regime on the parents.
When the parties can’t agree, then the court, often with the assistance of a specially trained individual who investigates the children and the parents, will make a decision as to where the children will live and how much time they will spend with each parent.
Who makes decisions for the children ?
The most common situation is that the parent with guardianship has the right to make major decisions, and has a corresponding duty to consult with the non-guardian parent before making a decision. If they can’t agree then the parent with guardianship may make the decision, must inform the other parent, and the non-guardian parent has the right to challenge those decisions in court if that parent disagrees.
How much Child Support will I receive ?
Child support is mandatory and the amount is set by the Federal Child Support Guidelines. This link http://www.justice.gc.ca/eng/pi/fcy-fea/lib-bib/tool-util/apps/look-rech/index.asp will take you to a simplified calculation website.
What is Shared PARENTING/Custody ?
Shared Custody is where the childrens’ time is split between the parents so that each parent has each child at least 40% of the time over the course of a year.
What is Split PARENTING/Custody ?
Split Custody is where there are 2 or more children and each parent has full custody of at least one child. Full custody for these purposes is having the child more that 60% of the time, and the other parent has that child less than 40% of the time.
Will Child Support be different if we have Shared PARENTING ?
Yes, often it will. If each parent has the children at least 40% of the time over the course of a year, then the court will adjust the obligations of each parent, considering a number of factors. A common method (but not the only method) is to determine the amount each parent would pay if that parent had the children less than 40% of the time, and offset the 2 amounts against each other to determine a net amount. The parent whose amount is the greater pays the net amount to the other parent.
Will Child Support be different if we have Split PARENTING ?
Most of the time, you simply calculate the amount each parent would pay and offset the amounts against each other. The parent whose amount is the greater pays the net amount to the other parent.
Can I agree to taking no child support if my spouse agrees to give me custody ?
No, you almost always can’t. The situations where you may do this are very rare and you should consult a lawyer to see if it is possible. Almost always, child support is mandatory. Child Support is the right of the child and not of the parent. This means that the parent with custody has no ability to agree to forego child support, because that parent has no right to give up in the first place. If a parent tries to give up child support, the government may step in and require child support; the government will frequently do this if you apply for social assistance. Any well-meaning person can do the same – for example an older sibling or a grandparent can take the non-paying parent to court for a support order even if the parent with custody doesn’t want to. The child herself can take the non-custodial parent to court for support; if she is under the age of majority she has to get someone to act on her behalf, or she can ask the court for an order allowing her to do it herself. Even years later, the child can go and ask for back support.
Can I agree to no spousal support ?
Yes, you can, even when it is not a very good idea to give up spousal support. One exception is if you apply for social assistance – in that case the government has the right to take the other spouse to court and ask for a support order so as to collect money and offset the public money given for social assistance.
How much spousal support can I get ?
Spousal support is not mandatory. There are really two questions: (1) Are you entitled to Spousal Support? and (2) If you are entitled, to how much?
Entitlement depends on so many factors that it is said that every case is unique; by that it is meant that in each case there are factors that must be examined along with many other factors, before a determination of whether or not you have an entitlement is made. Some of these factors (but by no means all) are the ages of the spouses, if there are children under the age of majority, if there are disabled children over the age of majority, the length of time the spouses cohabited, whether both or either worked outside the home during cohabitation, their education, experience and job history, their incomes, whether or not they support other individuals (such as a first family), and many other factors.
How much is the 2nd part of the question; if you have an entitlement then the court will balance a number of factors; some the same as in determining entitlement, and some different. Then there are the Spousal Support Advisory Guidelines. These are not mandatory, but in British Columbia, are very frequently followed. The amount depends principally on the net incomes of both parties and child support amounts being paid, as well as other factors.
There is an online calculator from a company called DivorceMate™ and that calculator is found here http://mysupportcalculator.ca/ Our lawfirm does not pay to be included in the referral service operated by the company and found at its online calculator. Therefore you will not find us listed in the list of lawyers at that site. The calculations are basic and intended to give you a ballpark figure; in our office we can work out much more accurate amounts and give you an accurate estimate of how long spousal support ought to continue for.
Can I agree to an amount of spousal support different than the Advisory Guidelines ?
Yes; you can generally agree to any amount of spousal support you and your spouse settle on, with the proviso that if you apply for social assistance, the government has the right to take your spouse to court and ask for a support order so as to collect money and offset the public money given to you for social assistance.
Do I pay tax on Child Support ?
No, you don’t report child support received on your Income Tax return and you don’t pay tax on it.
Can I deduct Child Support from my income tax ?
No, you don’t report child support you pay on your Income Tax return and you don’t deduct it.
Is Child Support based on Gross or Net Income ?
Child Support is based on the paying parent’s gross income. Most of the time that is what amount the spouse reported at Line 150 of his or her last year’s Income Tax Return.
Do I pay tax on Spousal Support ?
Yes. You must report Spousal Support received on your Income Tax return and pay tax on it.
Can I deduct Spousal Support I pay from my income ?
Yes. You report Spousal Support you pay on your Income Tax return and you may deduct it. The Federal Government will probably require a copy of the Court Order or Separation Agreement for Spousal Support to prove you have to pay it. If it’s a verbal agreement only, you probably won’t be allowed to deduct it.
What if I don’t deduct Spousal Support ?
If you don’t report Spousal Support you pay, you don’t get a deduction, but the receiving spouse still has to report it and pay tax on it.
What if I don’t report receiving Spousal Support ?
The paying spouse still is allowed to deduct it and you still have to pay tax on it. If it’s a verbal agreement only, you still have to report it and pay tax on it.
How are our assets divided ?
Usually 50/50, and usually after there has been payback to each spouse of an amount that each spouse contributed to the assets of the family, but there are many exceptions; so many that it would take pages and pages to explain them. This is a situation where you really must see a lawyer.
The house is in his name only – am I entitle to a share?
Usually you are; your entitlement does not arise because of whose name is on the title, but because the house was used for a family purpose and you have contributed to it’s maintenance, upkeep and so on.
Am I entitled to a share in the house if I didn’t pay for it ?
Usually you are; paying for an asset with money is only one way to acquire an interest in it. Generally both parties contribute value in many ways as well as contributions of money. Managing the household, doing upkeep and repairs, doing daily household chores, caring for the children, cooking the meals, doing the laundry, and the many other things that people do to keep the household going are all valuable contributions and they are presumed to be equal to the earning brought in from outside the home by the other spouse. The spouse who paid for the down payment would usually get that money back “off the top” and the increase in value would be divided.
Is a house or other assets ever divided unequally ?
Yes, houses and other assets are can be divided unequally; for example if a spouse needs more because of some disability, or because the marriage was long and realistically the spouse is too old to go out and work, then there may be an unequal division. This is especially so (just two examples of many) if the other spouse can’t pay spousal support or has assets outside the country that can’t be divided because the court has no jurisdiction over them.
When a spouse has assets outside the country, often the court will order an equal division, allowing the assets outside the country to be retained by the spouse in whose name they are, and offsetting the value against assets in Canada, so the spouse without assets outside Canada gets more of the ones in Canada, to make things equal.
Are RRSPs and Investments divided ?
Generally, all assets are divided after payback of the amount brought into the asset by each spouse.
Do I have to share my inheritance with my spouse ?
No, not usually, and especially not if you have kept the inheritance separate and not used it for a family purpose. Even if you have used it for a family purpose (such as paying down the mortgage) the court will divide the assets so you receive a payback of what you contributed; in effect giving you back some of your inheritance.
Do I have to share my lottery winnings with my spouse ?
No, not usually. The situation is similar to how an inheritance is treated.
Do the children have a say in Custody & Guardianship ?
The British Columbia Family Law Act in Section 51(4) requires that children 12 and older be consulted before any order as to their guardianship is made, and they must consent to any guardianship order in writing. In BC, our Supreme Court has said that a child must be consulted in a 2009 case called Beatty v Schatz which is reported as 2009 BCSC 707. The United Nations Convention on the Rights of the Child provides for the right of the child to express the child’s views and says that these views are to be given due weight in accordance with the age and maturity of the child (Art. 12.1), and the child is to be provided the opportunity to be heard in judicial proceedings (Art 12.2). The Convention does not set a lower age limit of the child as to when these duties and obligations arise. The Convention was ratified by Canada in 1991. However, In practice, these requirements are almost never observed.
Frequently, orders will be made saying where and with which parent a child will live, without input from a child. Even when the child has input, often the order for custody and access does not reflect the child’s wishes, or event hat the child was consulted.
In many cases, if the child is old enough and mature enough to simply take matters into her own hands, and unilaterally move to somewhere other than the court has ordered (without the influence of a parent forcing or cajoling or bribing the child) then the courts will accept the child’s choice as a fait accompli; the child has “voted with her feet”. There is no magic age at which this occurs; sometimes children as young as 11 have done so successfully and sometimes a child of 15 is not mature enough to make such a decision.
Advance Care Directive
A written document in which a person makes known his or her wishes as to what kind of feeding, hydration, pain management care and the level of life-preserving measures should or should not be provided under a variety of conditions, when the person is unable to make his or her wishes known. It is not binding on others but does carry a moral and ethical duty to observe the person’s wishes.
An agreement under which assets are turned over to an institution on the condition that the individual (or other designated person) receives prescribed regular payments for life (life annuity) or a set period of time.
Canada Pension Plan/Quebec Pension Plan
CPP provides monthly pensions to retirees, widowed spouses, orphans, the disabled, and children of disabled contributors. It also pays death benefits to the spouse and dependent children. Employees and employers make equal contributions. Self-employed persons must make contributions equal to the sum of the employee and employer contributions. Workers who contribute premiums to the Quebec Pension Plan are paid benefits according to their payments, years of service and family situation.
The profit realized when there is a difference between the market price of a security or property and the price at which it is sold.
Defined Benefit Plan
A company-sponsored pension plan that guaranteed a certain level of pension income at retirement calculated according to a predetermined formula.
Defined Contribution Plan
A company-sponsored pension plan that defines the contributions to be made by the employee and the employer. It does not, however, define the amount of pension income to be received at retirement. The accumulated value of the plan is used to purchase either a life annuity or, if the pension plan permits, a Life Income Fund (LIF).
When companies declare a profit they may pay part of it as a return to shareholders in the form of a dividend. The beauty of dividends is that they are taxed at a reduced rate compared to earned income or interest. Dividends are first “grossed up” and then reduced by a “dividend tax credit”, which causes the amount taxed to be less than that of interest or earned income.
The process of planning the transfer of all personal assets at death to chosen beneficiaries.
A (male) person appointed by a Will to carry out the wished of a deceased person, as expressed in the Will.
A (female) person appointed by a Will to carry out the wished of a deceased person, as expressed in the Will.
This is income paid to a person for lending money, usually at a fixed or increasing rate of interest over a period of time. Interest income is usually highly regarded because of the guarantee of some profit, although low interest rates in recent years have reduced the attraction, especially when such returns have been less than rates of inflation. Also, 100 per cent of interest income is taxed, more than dividends and capital gains.
A person who dies without a Will is said to have died “Intestate”. In this case the law of British Columbia provides how to distribute the estate and has a mechanism for appointing someone to deal with the estate.
Life Income Fund (LIF)
A special kind of RRIF for proceeds from locked-in RRSPs and LIRAs, with limitations. As with all RRIFs, a minimum amount must be withdrawn each year, but there is also an annual ceiling on how much can be withdrawn up to age 80. The remaining money stays locked in, and in many provinces it must be converted to a life annuity by Dec. 31 of the year you turn 80.
Life Retirement Income Fund (LRIF)
A fund which behaves like a registered retirement income fund (RRIF), converting funds from a locked-in retirement account (LIRA) into regular payments from whatever investment vehicles the fund-holder chooses. The minimum annual withdrawal is the same as for an RRIF, while the maximum is the greatest of: the accumulated income; the preceding year’s income; and, in the first two years of the plan, 6.0 per cent of the plan value. The major difference between an LRIF and LIF is that the former may continue past age 80.
Locked-in Retirement Account (LIRA)
See locked-in RRSP.
An account into which an employee may transfer the accumulated funds from a company pension plan he or she is leaving. In some provinces this is called a Locked-in Retirement Account (LIRA). Funds inside this account may be invested in instruments of the account-holder’s choosing, but no money may be taken out until retirement. At some time between age 55 and 69 this account must be used to purchase an annuity or converted to a Life Income Fund (LIF) or, in some provinces, to a Life Retirement Income Fund (LRIF).
Power of Attorney
A legal designation which permits an individual to act as your “attorney” – to make any decision and take any action on your behalf-should you become sick or disabled and were unable to act.
Registered Pension Plan (RPP)
A RPP is a trust registered with Revenue Canada and established by a company to provide pension benefits for its employees when they retire. Both employee and employer contributions to the plan are tax deductible.
Registered Retirement Income Fund (RRIF
A RRIF is a tax-deferral vehicle available to Registered Retirement Savings Plan (RRSP) holders who de-register their plans. The plan holder invests the withdrawn RRSP funds in the RRIF and each yearistered Retirement Income Fund (RRIF) must withdraw and pay income tax on a set fraction of the total assets in the fund.
Registered Retirement Savings Plan (RRSP)
A vehicle available to individuals to defer tax on a specified amount of money to be used for retirement. The holder invests money in one or more of a variety of investment vehicles which are held in trust under the plan. Income tax is deferred until the money (the amount originally deposited plus any capital gains, interest or dividends made on that money) is withdrawn at any time. An RRSP must be wound up by Dec. 31 of the year the plan-holder turns 69, and can be either cashed in, used to buy an annuity, or converted into a Registered Retirement Income Fund.
Return of Capital
Some investments, like income trusts and annuities, have regular payments or distributions that include not only interest on income earned from the investment, but also the return of a portion of the original principal invested, namely a return of capital. Tax must only be paid on the interest or dividend portion, not on the return of capital, since this is money a person has invested after tax. However, the return of capital reduces one’s adjusted cost base. When a person sells an income trust, they must pay capital gains tax on the difference between the net selling price minus the purchase price and commissions and the accumulated return of capital.
Traditionally a client who manages a brokerage account with no outside assistance. Self-directed accounts have access to all of the traditional brokerage products and services.
This is a Registered Retirement Savings Plan taken out in the name of a spouse, and is a good way of income splitting. It allows one spouse with RRSP contribution room to contribute to a spouse without such room. The contributor gets the contribution tax deduction, while the recipient pays taxes when the amount is withdrawn, usually at a lower marginal tax rate than the contributor. The caveat is that if any spousal RRSP money is withdraw within the current tax year or any two previous years, it become taxable in the hands of the contributor.
This is an investment that offers tax savings in some form, such as immediate deductions, credits or income deferral.
A person who dies and has in place a Will is said to have died “Testate”
A legal arrangement in which one person (the settlor) transfers legal title to a trustee (a fiduciary) to manage the property for the benefit of a person or institution (the beneficiaries).
A formal written document that appoints someone to carry out the wishes of a deceased person. The major points that it provides for are appointing someone to be in charge carrying out the deceased’s wishes (the “Executor” or “Executrix”); appointing someone to handle the assets in the estate (the “Trustee”). Often but no always the Executor and the Trustee are the same person. The Will provides what specific powers the Executor and your Trustee will have when dealing with the estate. The Will directs who will receive what assets. If there are minor children, a Will will often appoint a guardian for them.