Textbook Notes (362,790)
Canada (158,054)
Finance (361)
FIN 502 (69)
Joan Lobo (33)
Chapter 5

CFIN502- Chapter 5- Family Law.docx

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Ryerson University
FIN 502
Joan Lobo

CFIN502- Chapter 5- Family Law INTRODUCTION  Entire body of statues, regulations, and precedents—govern relations between spouses, parents, and children o Precedents- decisions reached in cases that went to trial and that are relevant to the issue under consideration  Also called case law  Relevant statues divorce act, family law act, income tax acts, regulations attached  Difference between separation and divorce o Separation agreement- contract between spouses in which they agree to live separate lives and set various conditions  Important limitation—concerns the welfare of minor children- has to meet external standards  Spouses still married o Divorce- granted by a court upon application by a petitioner  Act governs all divorces in Canada- end marriage  Grants to the court the power to make orders on all subjects relating to marriage dissolution  Except—division of family property  Married couples- 2 persons who completed a ceremony of marriage that is recognized  Spousal couple- 2 persons, same sex or opposite sex—living in a conjugal relationship, regardless of whether they are married WHAT IS A FAMILY?  Family- grouping of people whose affairs are so closely related that they plan their personal financial affairs together o Single person, spousal couple—regardless of sex or marital status  Dependent children—part of the family of parents with whim they live or upon they depend  Some laws define spousal couples much more narrowly—families are not usually defined to include anyone other than spouses and dependent children  Dec 4, 2004 supreme court of Canada—issued a decision agreeing that the federal government was within its powers to allow same-sex marriages  Divorce act if a marriage does not exist you can not terminate it—none of the legal provisions it allows are available  Federal income act spousal couple who have cohabited for at lease 1 year or who are married or have cohabited for led then 1 year but the union has produced a child o Dependent children age may extend as late as post-secondary degree  Family law- support obligations—couples who have cohabited continuously for at least 3 years or who have a relationship of some permanence and have 1 or more children including adopted o Support their partner as well as their dependent children  One omission lies in property rights—only married spouses can claim property rights under family law act on breakage of marriage  Succession law act- unmarried spouses to claim against the estate of a deceased partner as if they had been married MARRIAGE AND DOMESTIC CONTRACTS  Married couples may write and sign legally binding domestic contacts during period of relationship o Any provisions regarding the following during the relationship upon breakdown of relationship to upon death of one or both parties 1. Ownership of property or division of it—particularly upon relationship breakdown 2. Support 3. Right to direct education and moral training of their children—not custody 4. Any other matter in settlement of their affairs  Ontario, newfoundland, PEI, and Yukon—unmarried spousal couple can create a cohabitation agreement with any of the same provisions o If they subsequently marry—the agreement continues as a valid domestic contract until they revoke it formally 1 CFIN502- Chapter 5- Family Law  Third class domestic contract separation agreement  Domestic contract- generally accepted by the courts as valid and enforceable—even where the provisions do not follow the family act  Courts set aside provisions in domestic contracts that were prepared properly and would otherwise be binding 1. Cannot usually limit spousal rights to possession of the matrimonial home 2. Support obligations in the contract may be set aside if the lack of support cause “unconscionable circumstances”  “Really rotten and unfair” person who is denied support lacks the necessities for life while the former partner is wealthy 3. Someone did not fully disclose assets, liabilities or sources of income 4. One party was unable to understand the provisions of the agreement 5. Agreement was obtained through fraud or threats 6. Court may decide that the contract does not provide for the best interests of the children of the relationship ENDING A RELATIONSHIP  Termination of a spousal relationship by separation and divorce rather than death  Separation- contract in which they determine how this happens with respect to property division, support each other and dependent children, custody of children, rights to visit children, possession of the matrimonial home o Other matters—maintenance of life insurance or specific payments contingent on unforeseen future needs o First step—stop living with each other o Domestic contract bound by the same rules as marriage and cohabitation agreements except that child custody may form pat of the agreement o Do not need to be married to create a separation agreement—crucial difference between married and unmarried spouses  Provisions of family law act do not apply respect to division of property— unmarried spouse cannot enforce any division of property  Divorce act—does not cover division of property- it can deal with any other aspect of the dissolution of a marriage o Financial disclosure- fundamental request- balance sheet including considerable information about major assets, income statement, and a budget for each individual  Failure to meet the disclosure requirements—invalidate a separation agreement and even lead to some serious penalties  Divorce o 1986- federal divorce act set grounds for divorce 1. Intention separation for 1 year—martial difficulties 2. Adultery 3. Husband or wife subjects the other to intolerable physical or mental cruelty o Respondent agrees with petitioner and does not contest the divorce—granted quick and easy  Parties do not attend the actual court hearing of the petition except NFL and Quebec o Contested divorces are not common—cost a lot in legal fees o Problem couples has not satisfactorily worked out the details of living apart through a separation agreement o Divorce act—gives the court no authority over division of property  It can change or set aside provisions in a separation agreement regarding other matters—support of dependent children SUPPORT  Dependent children o Parent obligation—provide support for unmarried dependent children who are under the age of 18 or who are in full-time attendance at an educational institution o Does not extend to a child at least 16 years of age who is no longer under parental control o Children with disability—may require support for their lifetime 2 CFIN502- Chapter 5- Family Law o Separation agreement clause—require one parent to continue to provide support for children who are older than 18 but continue to live at home and attend an educational instruction full time o A person who marries or cohabits with someone with dependent children from a previous relationship  Have a support obligation to the children if they continue to live with the new spousal couple or receive support from them  Addition—person who is natural parent of a dependent child but not living with them may nonetheless be ordered to provide support o Guildlines contains specific amounts calculated for the number of children and the income of the spouse who is contributing the support  Up to an income of $150,000  Without variation—amount per month, plus a fixed percentage per month times the annual earnings o Income tax act—child support is not taxable in the hands of the recipient  Nor can the spouse who is paying support deduct it for income tax purpose  Tax efficiency—support is usually paid by the taxpayer with a higher income- there is a tax disadvantage to the payment of a periodic amount  Spouse o Alimony- under old laws, was an allowance a man paid to his former wife for her living costs, but he had to pay it only if he had been guilty of adulte
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