Reappointment claims or unequal division of assets are claims that sometimes have to be defended or prosecuted as the case may be.
While there may be a presumption that an asset is characterized as family property and divided equally, that is not always appropriate. If after separation one spouse is solely responsible for preserving an asset or another spouse takes steps to damage an asset or negatively affect its value, an equal division may be unfair as a result of post-separation events. Such issues need to be analyzed and addressed.
One of the cornerstones of family law litigation is disclosure. There are numerous types of disclosure or ways of getting information in connection with another spouse’s income, assets, employment prospects and so forth. Apart from the exchange of Financial Statements, there can be an exchange of a List of Documents, Examinations for Discovery can take place and Interrogatories can be issued. These are some of the matters we assist our clients with.
There are many ways to preserve property prior to a determination of whether such property constitutes family property or not. For example, when initiating a claim, one way of preserving an interest in property is by filing a Certificate of Pending Litigation (which used to be called a Lis Pendens or Lien) against property.
It is relatively inexpensive and can be done without first providing notice to the other spouse. If property is being held by relatives or friends on behalf of spouses, Certificates of Pending Litigation may be critical. In family law, the preservation of family property invokes the reverse onus rule. Normally, if you want a Judge to make an order, you need to be able to prove on a balance of convenience or balance of probability that the order should be made in your favour. When it comes to the making of an order pertaining to the disposition of property, the court must make the order unless the other spouse can establish that a claim will not be affected if there is a disposition of that property. On occasion, generic property restraining orders can be made and on occasion, specific restraining orders can be obtained in connection with specific bank accounts or assets to be preserved until a Judge can determine ownership or distribution.
Constructive trust claims are still regularly utilized in advancing an interest in property despite common-law spouses having identical property based rights as married spouses under the Family Law Act. Constructive trust claims are still utilized when property in dispute is in the name of third parties such as the other spouse’s parents or friends. In such circumstances, the legal title to the property belongs to a third party while the beneficial ownership (the right to the property) may belong to one or both of the spouses. These claims are complicated but routinely pursued.
Sometimes spouses separate within the same household but the continued living arrangements are uncomfortable. An order can be made for exclusive occupation of a home. Such an order does not determine ownership of a home but just determines who has the right to live in the home.
Court applications sometimes have to be made for the sale of property. In such cases, the net sale proceeds of property are held in trust until there is a court order detailing the distribution of the funds or there is an agreement between the parties regarding the use of the funds. Sometimes an interim distribution is required. If an interim distribution is not agreed to by one of the spouses, a court application can be made regarding an advance of some of the net sale proceeds of an asset.
There are numerous other matters that are dealt with in family law; too numerous to list.
There are some basic tax considerations to take into account. For example, $10,000 in a savings account is not the same as $10,000 in an RRSP. If you withdraw $10,000 from a savings account you have exactly $10,000. If you withdraw $10,000 from an RRSP account you are obligated to pay income tax on those monies at your marginal tax rate.
Potential tax issues arise when having to identify whether one is dealing with capital property, non-capital property, a principle residence, share purchase, share transfers (share redemptions) and so forth. There are tax-free intercorporate dividends that can be utilized, butterfly rollovers to defer taxes payable and other considerations that require identification of a tax issue and selecting an appropriate mechanism by which to either minimize tax or defer it.