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Law 2101 (735)
Lecture

# fl2.docx

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School
Department
Law
Course
Law 2101
Professor
Mysty Sybil Clapton
Semester
Winter

Description
FAMILY PROPERTY Family law Class #2 January 15, 2013 Calculating Equalization Sum Example 1 (p. F-15)  Step 1  Valuation date (date of separation) = September 1, 2012  Assumes that there was no reasonable prospect of resumed cohabitation Step 2  H’s Net Family Property..value of assets- debt ½ joint bank act = \$2,000 + Corvette = 30,000 (his alone) + ½ furniture(10,000) = 5,000 \$37,000 **Part 1 of Family law act imposes deferred, equal sharing of economic gain during marriage - Sharing deferred until end of relationship - Economic gain attributed to relationship= Net family property - NO SUCH thing has negative NFP, =\$0 - If owned equally, its split up in two, unless owned previous to marriage by one - Deduct excluded property (property acquired by gifts) spouse who has it does not share it - Income from property/ inheritance owned by one spouse, excluded if will says it was left to you only or from third person - Criminal compensation does not have to be shared, unless put in joint bank account - Special rules relating to MATRIMONIAL HOME: NO DEDUCTION OF VALUE OF MH AT MARRIAGE and no exclusion of value of MH even if attributable to inheritance of gift Step 3-5  Husbands’s NFP  No exclusions  No deductions  No debts at separation  No property at marriage  H’s NFP = \$37,000 Calculating NFPs: wife, step 2  Wife’s NFP ½ jt bk act = \$2,000 + Escape = 20,000 + ½ furniture = 5,000 \$27,000 Step 3-5  W’s NFP (Steps 3 - 5)  No excluded property  No debts  Marital property = \$1000 (car)+ \$1500 (bank act) - \$500 (car loan)(debt) = \$2000  W’s NFP = \$27,000 - \$2000 = \$25,000 Calculating Equalization Entitlement H’s NFP – W’s NFP 2  = \$37,000 - \$25,000 2  = \$12,000 ÷ 2 = \$6,000 Example 1  H owes W \$6,000  H keeps Corvette (\$30,000) & W keeps Escape (\$20,000)  They need to split the furniture & the \$4000 in joint bank act 50/50  H may offer his share of the furniture instead of \$6000 (equalization sum) Example 3 - Valuation date: December 31, 2012 - Harry and Wanda, both own home, move into Harrys - Henrys owns a home worth \$350,000 + 50,000 of assets= \$400,000, no debt, no exclusions (gifts, inheritance), \$50,000 deducted because it was his ASSET before the marriage. NFP= \$350,000 - Wanda owns a home worth \$250,000 and also has \$50,000 in assets- no debts, exclusions, BUT her home was not the matrimonial home so the \$250,000 gets deducted and so does the \$50,000, NFP: \$100,000 - Difference= \$350,000-\$100,000/2 =\$250,000/2= \$125,000 - Harry owns Wanda \$125,000 Unequal Sharing of NFPs (s. 5(6) FLA)  Courts have limited discretion to deviate from equal sharing of gain attributed to partnership: they may deduct or add, intentional depletion of property WILL BE PENALIZED  Rarely done – high threshold – equal sharing must be “unconscionable”  No unequal sharing just because one spouse earned more & paid for most or all property Treatment of employment pensions - Pensions= property interest - Values included in NFP - Defined benefit plans (guaranteed certain amount per month based on years of service) present complex valuation issues; not so defined contribution plans (no guarantees how much earned at the end, portion of your money goes in and portion of job puts in) Settlement options Value of spouses pension may result in large equalization debt In 2012, it was made allowed to be able to transfer lump sum Examples of Unequal Sharing of NFPs  Short marriage (less than five years) and spouse brought matrimonial home into marriage (s. 5(6)(e) FLA)  Spouse has significant gambling or similar debts on valuation date (s. 5(6)(b) FLA)  Spouse made significant gifts or other dispositions of property just before valuation date (s. 5(6)(d) FLA) Matrimonial Homes (Part II FLA)  Each spouse has equal right to possession regardless of ownership  Unless separation agreement or court order specifies otherwise  Court can grant exclusive possession to one spouse, usually in the interests on the children if involved  Temporary orders more frequent than long-term  Owning spouse cannot sell, rent out, or mortgage MH without other spouse’s consent Unmarried Coup
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