Can I be summoned to pay my fiance’s child support in Ontario? Question: I am engaged to someone who already has kids from a previous marriage: 6, 13 and 14 years. If he defaults on his child support payment, will I be asked to pay his support? Will my income be factored in? How can I protect myself? – Advice Scene Child support is the right of the child and the obligation of the parent. So, the quick answer is no. But, like most things in the law, things can be more complicated than that.Child support is always payable by a biological or adoptive parent that has a child for 50% of the time or less (where there is “shared parenting”, the amount of child support can vary from the child support tables, but usually both parents paytable child support to each other). For more about how child support works watch this video and listen to this podcast.In Ontario, getting married does not mean you “own” your spouse’s assets nor does it mean you are responsible for their debts – including any debts for child support. Part 1 of Ontario’s Family Law Act covers property division on separation. For a full explanation of how that works, watch this video, and listen to this podcast. But to summarize, separated married spouses share in the increase in each other’s net worths, but not in the actual assets themselves. Common-law couple have even fewer property rights. So, if your fiancé is in debt to his ex for child support, that is not your debt.However, unfortunately, that may not be where it ends. Your fiancé’s child support debt could end up being your problem too.First, with regard to property division, if you separate, you share in the increase in your spouse’s net worth. If you are married to your spouse, and he builds up a child support debt, that debt decreases his net worth. So, on separation, his net worth is lessened by the amount of that child support debt. Since, on separation, you essentially get half of his increase in net worth (and he gets half yours), any debt he reduces is how much you will get by half of the value of that debt. So, you end up indirectly paying half of that child support debt because of the decrease in what he shares with you. If you have a greater increase in net worth during the marriage, you would owe him an “equalization payment”. So, if his net worth is decreased by child support debt, how much you owe would be increased by half the amount of that debt. In that case, you are, indirectly, paying half of that child support debt. These types of debt problems, which can have very unfair results, can be fixed with a marriage contract. Click the link to see a video on how to use a marriage contract to avoid sharing your spouse’s debts. You could have a contract that says your spouse’s child support debts will not affect the property. Equalization if you’re separate.There is another way child support for your spouse’s kids can become your problem. I noted that child support is the obligation of parents. That can mean more than just biological or adoptive parents. While biological and adoptive parents always pay full table child support, other people who have acted as a parent to a child can be on the hook for child support too. That means that, as a step-parent, you could end up owing child support to your spouse’s ex. Listen to this podcast that explains more. This does not mean you share in your spouse’s child support obligation, but it means you have your child support obligation for the kids. As explored in this video from a high-profile new story, acting as a parent to someone else’s kids can create a child support obligation – especially where you do it with the best motivations.So, while you are not directly responsible for your fiancé’s child support, you could end up sharing in that debt if you separate from him after getting married if he owes back child support. You could also end up owing child support yourself if you act like a parent to his kids. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawDecember 17, 2020June 24, 2021
Do I Have to Give Half Our House to My Ex-Spouse Even Though I Paid for it Myself? This blog is co-written by our former articling student, Janet Son. With the rising costs of housing in the GTA, the question of what happens to property after divorce can loom heavily on those who enter into marriage with significant assets. In Ontario, the Family Law Act, R.S.O. 1990, c. F.3, (the “FLA”) is the legislation that governs the property rights of separating spouses including the “equalization of net family property”. Generally speaking, the purpose of equalization is to calculate the value of assets accumulated during the course of the marriage and to have it divided equally between the spouses, subject to exclusions such as gifts and inheritances. However, it does not actually change the ownership interest of the property itself. There are special rules that apply to the matrimonial home which is property where at the time of separation was “ordinarily occupied by the person and his or her spouse as their family residence”. Even if only one party owned the matrimonial home prior to marriage, the full net value of the home is equalized. This leads to the question: is it worth it to get a marriage contract (also known as a pre-nuptial agreement) to protect your property that you purchased prior to marriage and are now using as the matrimonial home? In Martin v. Watts, 2018 ONSC 2622, clauses in the parties’ marriage contract regarding the division of their matrimonial home upon relationship dissolution were upheld. The wife in this case used her assets to purchase a property that would become their matrimonial home. The parties entered into a marriage contract in 1990 that stipulated if the parties separated, the wife would receive a return of her cash contribution plus 25% free of any claim by the husband, with the balance divided equally. This provision would apply when there was a sale or buy out of the matrimonial home. The husband brought a motion to have the matrimonial home sold and for him to be given carriage of the sale. He relied on s. 52(2) of the FLA, which provides that “a provision in a marriage contract purporting to limit a spouse’s rights under Part II (Matrimonial home) is unenforceable.” However, the motion judge upheld the marriage contract and reminded the husband that the FLA does not actually create ownership rights so he does not have the authority to force the sale of the home. As long as the “intent of the contract is sufficiently clear, a domestic contract may provide an exemption from the equalization provisions of the legislation”. In other words, a carefully worded marriage contract could protect your property from equalization even when it is the matrimonial home. For more information on the specific wording required, speak to certified family law specialist Katelyn Bell on 416-446-5837 “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawNovember 19, 2019July 5, 2023
How is the Money from the Sale of a House Divided in a Divorce? Family lawyer John Schuman was recently asked this question: I bought my home in 1995 and it became the matrimonial home when i married my husband in 2009. I’m filing for divorce now and selling the house. Is the money from the sale of the house split 50/50 or will I receive a bit more being the original owner of the house? My husband is on the mortgage as well. Answer by John Schuman: When married couples separate in Ontario, the home (or homes – there can be more than one) that they live in on the day they separate gets special treatment in property “equalization” process. (Non-married or common-law couples may not divide property or may do it differently.) Those special rules may make it seem that matrimonial homes are divided “50/50”, but that is not actually how it works. The property division provisions of Ontario’s Family Law Act do not give married people any right of ownership over their spouses’ property or other assets. If title to the matrimonial home is in your name, it stays in your name, subject to some claims your spouse can make if he or she makes significant contributions to that property. Just being married does not mean spouses both own their home (or homes). Watch this video for more details on how Ontario Law divides the value of property, not the property itself, on separation. There are a number of special rights that attach to matrimonial homes (or homes). One is that neither spouse can kick the other out of matrimonial home, or secure debt against a matrimonial home, without the other spouse’s consent or a court order. The reason people think they share the equity in matrimonial homes 50/50 is that, absent a marriage contract, the entire equity in a matrimonial home is always included in the value of assets that married spouses share. With almost every other type of asset, spouses only share in the growth in the value during the marriage. However, section 5(2) of the Family Law Act does not allow a spouse to get any credit for bringing a property into the marriage if that property was a matrimonial home on the date of separation. So, without a marriage contract, spouses share whatever value is in their matrimonial homes. Spouses do not necessarily have to give their spouses “half the house” on separation. That spouse is entitled to stay in the house, and to have the equity included in property division, but, if a home is not jointly owned, there is not right to “half of it.” It is just included in the assets to be divided. So, if the spouse who does not own the matrimonial home has lots of savings or a pension to include in his or her assets to be divided, that may offset the value in the matrimonial home. If the spouse who owns the matrimonial home had a lot of assets (other than the matrimonial home) on the date of marriage, his or her increases in net worth may be less than the other spouse, which would mean the home would not be divided. The same may be also be try if the spouse who owns the matrimonial home has a lot of debt on separation may not have the increase in net worth that is necessary to owe the other spouse anything. But, in short term marriages, there is a real danger that a spouse can walk away being entitled to half the other spouse’s home. If the marriage was short, the couple may still live in the same house that one spouse brought into the marriage. In that case, the spouse with the house has to share half the value of the house because there were almost no changes in each spouse’s financial situation and so nothing to offset the value in the matrimonial home when the spouses “Net Family Properties” are “equalized.” Watch this video or listen to this podcast, for more on the dangers posed by the law of matrimonial homes. Note that that the special rights for matrimonial homes only apply between two spouses. Those rights regarding matrimonial homes do not apply to third parties, such as in-laws, landlords, business partners, or friends. A spouse has no right under Family Law to stay in a home owned by his or her in-laws or another landlord. You certainly do not become entitled to “half” of a matrimonial home that neither spouse owns. People who think they should have rights with respect to a property that is not owned by them or their spouse should speak to a lawyer to see if any other type of law might help. Before or after a marriage, spouses should never assume that the matrimonial home will just be divided 50/50 until they have each spoken to a lawyer to figure out how Ontario Family Law will work in their family’s situation. This is an area where making a mistake can cost hundreds of thousands of dollars. There may be things a lawyer can do to make things fairer – especially before a separation. But even after separation, there may be possibility of making the tricky legal arguments to adjust how property is divided either pursuant to section5(6) of the Family Law Act or the Principles of Equity. Obviously, there can be a lot of money involved in any marriage or relationship and that means there can be a lot at stake financially. Get the help of a lawyer immediately to avoid financial hardship. You can get a lot more information about Ontario Family Law issues, including property division, support, and most other common family law issues by downloading this $9.99 e-book for Kindle, Kobo, or iPad/iPhone/Mac or ordering the paperback version. But, to keep out of trouble, it is always best to speak with a top family law lawyer. By Fauzan SiddiquiBlog, Family LawAugust 30, 2017July 5, 2023
Am I Liable For My Ex-wife’s RRSP Losses? Toronto Family Lawyer John Schuman was recently asked the following question: Is there any case law that would show I am not liable for any of the following losses? When applying for a divorce, you must fill out a financial statement. Before we were married my wife had RRSP’s that were called labour sponsored funds. They subsequently lost 90% of their value after we were married. I contend that I should not be liable for any of these losses. Answer: On the breakdown of a marriage (but not a common law relationship), spouses “equalize” their assets and liabilities and share, with some exceptions, the growth in their net worth during the marriage. This video explains “Equalization of Net Family Property” in greater detail. Many separating spouses can feel that the equalization process can be unfair – particularly where one spouse has spent money on stupid things, gambled it away, is getting a windfall due to the division of the matrimonial home, or it has been a very short marriage. In these and other situations, dividing up all property “50/50” can seem unfair. Section 5(6) of Ontario’s Family Law Act does allow a Court (or Family Arbitrator) to deviate from the usual equalization of Net Family Property and divide the family’s wealth another way. It accommodates all of the scenarios above and a few others. However, the test that the Family Court (or arbitrator) has to use is not whether the normal “equalization” would be unfair. Section 5(6) says that to deviate from the normal equalization, the Court must be “of the opinion that equalizing the net family properties would be unconscionable.” “Unconscionable” is much more than just unfair. The case law says that it means that the usual result must be “shocking to the conscious of the court.” That is much more than just unfair. One spouse spending a lot of money on an affair is not enough. A spouse spending too much is not enough. Justice Jennings put it this way: The result must be more than hardship, more than unfair, more than inequitable. There are not too many words left in common parlance that can be used to describe a result more severe than unconscionable. Specifically on the issue of investment losses, the Courts have held that improvident (stupid) investing is not enough to justify an unequal division of net family properties. The investment must have been made recklessly or in bad faith. That means the spouse must have known, or should have known, that the investment would become worthless. Risky investing is not enough. The spouse must have acted deliberately to lose money or known that he or she was likely to lose money. That can definitely seem unfair – especially when one spouse is a conservative investor and one spouse is a high risk investor, or where one spouse’s savings have done really well and the other spouse’s investments have done poorly. But, fairness is not the test. Different opinions on finances can cause stress in, or event the end of, a lot of marriages. Where spouses have significant differences of opinion about money, they should consider getting a marriage contract. Spouses can get a marriage contract at any point during the marriage. They can keep a marriage together if one spouse wants to do something risky and the other one wants financial protection. This video explains how to protect yourself and save your marriage with a marriage contract. But, if you are separated now, it is likely too late for a marriage contract, and you have made one of the common family law mistakes. You should speak to an excellent Family Law Lawyer as the only way to correct this may be through spousal support, as section 15.2(6)(a) of the Divorce Act allows a judge to address the economic consequences of the marriage and its breakdown through spousal support. That can be through either awarding spousal support or reducing an amount of spousal support to reflect how the marriage affected the spouses financially. You can get a lot more information about Ontario Family Law issues, including support and property division, and most other common family law issues by downloading this $9.99 e-book for Kindle, Kobo, or iPad/iPhone/Mac, or ordering the paperback version. But, to keep out of trouble, it is always best to speak with a good family law lawyer. John Schuman is a Certified Specialist in Family Law. He is the partner managing the Family Law Group at Devry Smith Frank LLP, a full service law firm located near Eglinton and the Don Valley Parkway in Toronto. Learn more about John! Call him at 416-446-5080 or 416-446-5847 or email john.schuman@devrylaw.ca Listen to the Ontario Family Law Podcast! “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By Fauzan SiddiquiBlog, Family LawJune 30, 2017June 22, 2020