What is Undue Hardship Under the Federal Child Support Guidelines?

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In certain circumstances, a party required to pay child support may need to claim undue hardship under section 10 of the Federal Child Support Guidelines (the “Guidelines”).This means that the party would be caused to suffer unduly if made to pay the full amount of support originally required. If the party shows the court why they’re unable to pay the amount of support determined under the Guidelines, the court may reduce the value they’re obligated to pay.

Circumstances that may cause a party to suffer undue hardship include:
• The spouse has responsibility for an unusually high level of debt reasonably incurred to support the spouses and their children prior to the separation or to earn a living;
• The spouse has unusually high expenses in relation to exercising parenting time with a child; or
• The spouse has a legal duty to support any person who is unable to obtain the necessities of life due to an illness or disability.

The party claiming undue hardship must also prove that they have a lower standard of living than their ex-spouse. It’s typically very difficult to prove undue hardship because it’s viewed as unfair for one spouse to pay less than the Guideline requirement of support.

In Kelly v. Kelly, 2011 BCCA 173, the judge made it clear that future courts must very carefully exercise their discretion to order a different amount of support (para. 35). The objectives of the Guidelines should not be circumvented; predictability and consistency in support obligations are key components of our family justice system.

If you have any questions, please call Heath Law LLP to book a consultation.

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What Factors Contribute to a Successful Will Variation Claim?

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While will-makers have flexibility regarding how they dispose of their assets upon death, if they fail to adequately provide for a surviving spouse or child, their will may be varied by the Court. Section 60 of the Wills, Estates and Succession Act of British Columbia authorizes a court to order compensation that it finds adequate, just, and equitable, out of the will-maker’s estate. Only spouses and children of the testator may seek a variation and must commence an action within 180 days from the Grant of Probate. Spouses include common-law partners, with whom the will-maker was in a marriage-like relationship for at least two years. Case law has excluded stepchildren not adopted by the will-maker and birth-children adopted by third parties from being proper applicants of a will variation claim.

The seminal case regarding wills variation is Tataryn v. Tataryn Estate, [1994] 2 S.C.R. 807 (“Tataryn”), where the Court held that a will-maker must meet both their legal and moral obligations to surviving children and spouses. The legal obligations are those which would have been imposed if property division and support were considered during the will-maker’s lifetime. Moral obligations represent society’s reasonable expectations of what should be done in the circumstances and are linked to community standards. While the Court in Clucas v. Royal Trust Corporation of Canada, 1999 CanLII 5519 (BC SC) held the will-maker’s autonomy should only be interfered with to the extent statute requires, there are some factors which often lead to variation, even in the situation of adult children who are financially independent.

The standard of living which the will-maker allowed a Plaintiff to become accustomed to will influence their level of moral obligation. In Wilson v. Lougheed, 2010 BCSC 1868, the Court considered the large size of the estate (nearly $20 million), the daughter’s current financial circumstances, and how the will-maker had historically treated her very generously when deciding to vary the will. While there is a general principle that Plaintiffs should continue to be maintained in a manner which they’ve become accustomed to, it is balanced against the estate’s ability to meet competing claims. Adult children who have financially contributed to their parents’ estates, but who are then not adequately provided for in the will are often successful under wills variations claims. This was seen in Wilcox v. Wilcox, 2000 BCCA 491, where the Court varied a mother’s will in favor of the daughter who’d made contributions to the financial purchase and running of the mother’s house. The years which the daughter had cohabitated with her mother, and the mother’s promise that the daughter would inherit the house portion of the estate also had weight in court.

The case law regarding when will-makers can limit or disinherit is ever-evolving and hinges around many factors. Will-makers’ wishes to limit inheritance may come into conflict with the moral obligations set out in Tataryn, specifically when a will-maker’s reasons might not be sufficient under community standards of what a judicious parent would have done. This was seen in Lamperstorfer v. Lamperstorfer Estate, 2018 BCSC 89, where the Court held that the will-maker’s mental health challenges and reclusiveness from society prevented him from meeting his moral obligation to his sons. Absent reasons otherwise, there’s an expectation that adult children will share equally in their parents’ estate, as seen in Laing v. Jarvis Estate, 2011 BCSC 1082. Yet reasons can be various, and the Court is hesitant to interfere with a will-maker’s wishes so long as they were made with a sound mind. In particular, Williams v. Williams Estate, 2018 BCSC 711, where a father arranged his affairs to leave all but approximately $5,000 of his estate to his favorite son, Brent, to the detriment of the other son, Ron. The will-maker had a much stronger relationship with Brent, and Brent also had dependants to support. Further, the will-maker had entirely lost contact with Ron for several years. Despite how the prevailing son Brent was financially stable before his father’s passing, and how the financial outcome was unequal, the Court refused to vary the will.

 

 

 

 

 

 

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Do Spousal Support Obligations Survive Death?

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What happens to spousal support when the person making the payments (the “Payor”) passes away?  Does the spousal support die along with the Payor or does the obligation survive, binding the estate of the Payor?

When married or common-law couples end their relationship, sometimes spousal support arises.  Spousal support is payment from one spouse to the other in recognition that one of the parties to the relationship may have sacrificed their own financial independence to help the overall landscape of the relationship whether that was providing care to the children of the marriage or giving up opportunities they would have otherwise been able to pursue had they not been supporting their partner.  Spousal support is usually paid pursuant to a separation agreement or a Court order.

Pursuant to s. 170(1)(g) of the Family Law Act of British Columbia (the “Act”), an order respecting spousal support can provide for payment after the death of the Payor.  S. 171(1) of the Act provides the elements that have to be present before a Court will order spousal support after the death of the Payor:

  • that the person receiving child support or spousal support has a significant need for support that is likely to continue past the death of the person paying child support or spousal support;
  • that the estate of the person paying child support or spousal support is sufficient to meet the need referred to in paragraph (a) after taking into account all claims on the estate, including those of creditors and beneficiaries; and
  • that no other practical means exist to meet the need referred to in paragraph (a).

If there was an agreement or order in place that provides for spousal support after death, then those provisions will have full force and effect and will bind the Payor’s estate until the period of payment provided for in the agreement or order expires.  To end the spousal support payments before the agreement or order expires, the Personal Representative of the Payor’s estate can apply under s.171(2) of the Act to set aside the agreement or order.

If the agreement or order for spousal support is silent as to whether spousal support survives death, the person receiving support can apply under s.171(3) of the Act to get an order requiring the Payor’s estate to continue to pay spousal support.

What about spousal support payments that are in arrears at the time of the Payor’s death?  Any spousal support payments in arrears at the time of the Payor’s death, will constitute a debt of the Estate: L.S.M.K. v. J.W.K., 2019 BCSC 2025.

Please contact Heath Law LLP at 250-753-2202 if you have any questions regarding spousal support or have any other Family Law related concerns.

 

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The Family Maintenance Enforcement Program and Costs

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The Family Maintenance Enforcement Program (FMEP) and Cost Awards

The purpose of this blog will be to provide a brief overview of the purpose behind the FMEP as well as discuss the type of cost awards the FMEP will enforce.

The FMEP is a free service provided by the BC government. The FMEP enforces support orders and agreements on behalf of the person who is owed support (“Creditor”).  Once someone is enrolled in the FMEP, all support payments must be sent to the FMEP. The FMEP processes the payments and sends them on to the Creditor.

To enforce a support order or agreement, the FMEP can take all legal steps the Creditor could take on their own. The FMEP can also take other steps the Creditor cannot, like restricting the driver’s licence of the person who owes support (the “Debtor”) or taking away their passport.

If support payments are missed and arrears are owed, the enforcement steps the FMEP takes depend on how much arrears are owed, the current situation of the Debtor, and the actions the FMEP thinks have the best chance of success in the circumstances.

The FMEP can garnish wages, redirect money from government institutions, file liens on the Debtor’s property, place restrictions on the Debtor’s licence or passport and even put the Debtor in jail.

As can be seen from the above the FMEP can be a very forceful tool in enforcing payments under maintenance orders.  However, what type of court costs will the FMEP enforce?

First, what are court costs?  There are costs associated with going to court.  They can include court filing fees, legal bills, attendance at court, “disbursements” (i.e., photocopy charges, printing etc.) and other related matters.  The general rule of costs is that absent any special circumstances or considerations, a successful litigant can obtain an order for his or her costs.  This means that if you win your case, the other party may have to pick up a significant portion of your court costs.

The FMEP will enforce maintenance payments and included in the definition of maintenance under the Family Maintenance Enforcement Act is fixed costs awarded under the regulations in favour of the director or a creditor.  Section 15 of the Family Maintenance Enforcement Regulations (the “Regulations”) say that the court can award costs if the court believes the default under the maintenance order could have been avoided.  This would lead to the conclusion that the FMEP will only enforce court costs that stem from s.15 of the Regulations.

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Spousal Support: Lump Sum vs Period Payments

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Spousal support is included in many separation agreements and Court Orders.  While the issue of whether a spouse is entitled to spousal support is addressed in a different blog, this blog, Spousal Support: Lump Sum vs Period Payments, discusses what form the support will take. Spousal support traditionally comes in two forms: lump sum or periodic (generally monthly) payments.

In a lump sum situation, the spouse paying spousal support (the “Payor”) transfers assets or money to the receiving spouse (the “Payee”) when the agreement is signed or when the Court Order is made.  Once that transfer is made, there will be no more spousal support payments.  For periodic payments, the Payor pays a certain amount of money to the Payee on a predetermined schedule, usually monthly.  The default option is periodic payments.

If the matter goes to a trial, the Court is more likely to award lump sum support (versus periodic payments) if any of the following circumstances exist:

  • There is a real risk that the Payor will not make the periodic payments;
  • The Payor is able to make a lump sum award payment;
  • The Payor has not made proper financial disclosure;
  • The Payor has the ability to pay lump sum but not periodic support; and
  • Lump sum support can immediately satisfy an award of retroactive spousal support.

The advantages and disadvantages of lump sum support will depend on the facts in each individual case.  Some advantages may be terminating ongoing contact between the spouses, providing money or assets to meet an immediate need of the Payee, ensuring spousal support will be paid where there is a real risk of non-payment of periodic support, and making it easier for a spouse to enforce lump sum support if the Payor does not pay.  Some of the disadvantages may be that the spouses are locked into the lump sum amount and are effectively deprived of the right to apply for a variation if the Payor’s income goes up or their income goes down.

Periodic payments are taxable income to the Payee and tax deductible for the Payor so are often preferred by Payor’s for that reason.  Lump sum amounts are not taxable or tax deductible.

If you would like to book an appointment with any of our family law lawyers, please contact Heath Law LLP at 250-753-2202 or toll free: 1-866-753-2202.

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Family Law: Challenging Property Division in a Cohabitation, Marriage or Separation Agreementin British Columbia?

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Is the Agreement Procedurally Unfair?

Before a Court will set aside an agreement, it will first consider the circumstances surrounding the agreement and whether the parties entered into the agreement in a fair manner.

The Court will consider several factors, such as whether:

  1. one party unfairly pressured the other into signing the agreement;
  2. one party had substantial power over a more vulnerable party;
  3. one party failed to disclose important information to the other party that would have affected the distribution under the agreement;
  4. there was an error in calculation or other mistake;
  5. one party lied to the other party about something that would have affected the agreement; and
  6. each party obtained legal advice about the agreement from his or her own lawyer.

After considering the above, the Court may stilldecide to not set aside all or part of the agreement if it finds that it would not have made a substantially different order for property division.

Is the Agreement, in Substance, Significantly Unfair?

Under a second step, even if the Court finds that the agreement was obtained in a fair manner, the Court may still set aside the agreement if the Court determines that the agreement is significantly unfair.

In determining whether the agreement was significantly unfair, the Court will consider:

  1. the length of time that has passed since the parties made the agreement;
  2. the parties’ intention in achieving certainty in making the agreement; and
  3. the degree to which the parties relied on the terms of the agreement.

If you need legal advice regarding a property agreement, please contact Heath Law LLP.

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Separation, Spousal Support and the Rule of 65

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Upon the separation of two spouses, whether married or common law, spousal support is a critical issue that needs to be discussed. This is especially important for those who are leaving long-term relationships because the effects of separation can be particularly severe for them. Spouses should be aware of a couple of rules that may determine how long spousal support will paid.

The Spousal Support Advisory Guidelines must be considered by the courts when considering the amount and duration of spousal support. Generally, support will be payable for 0.5 to 1 year for each year of cohabitation or marriage. So if two people were in a 14 year relationship, spousal support would be payable for 7 to 14 years. However, if the relationship lasted for 20 years or longer, the duration of support will be indefinite. Spousal support can also be indefinite under the Rule of 65. This rule calls for indefinite support when the age of the recipient spouse plus the length of the relationship equals or exceeds 65. The Rule of 65 does not apply to relationships that last for less than 5 years. For example, if two people ended a 10 year relationship when they were both 60 years old, support would be indefinite.

Indefinite support does not necessarily mean permanent support. It only means that no time limit can be set at the time of the order or agreement. Indefinite support orders are open to variation or review as circumstances change over time. Changes in circumstances may include a change of income, retirement, re-partnering, or if the recipient spouse has become self-sufficient.

Recipients of indefinite spousal support are under an obligation to make reasonable efforts toward their own self-sufficiency. There is no duty to achieve self-sufficiency, but efforts must be made. If a recipient fails to make reasonable efforts, the courts may impute income and reduce spousal support on a later review or variation.

If you would like to book an appointment with any of our family law lawyers, please contact Heath Law LLP at 250-753-2202.

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Family Law – Spousal Support as Compensation for an Economic Advantage or Disadvantage

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In BC, a Court can award spousal support to provide redress to a recipient spouse for an economic disadvantage arising from the marriage or for conferring an economic advantage on a payor spouse.  This is known as “compensatory support.”

In the recent case of Wilson v. Garbella, 2018 BCSC 864 [“Wilson”], the Court adopted the BC Court of Appeal case Chutter v. Chutter and summarized the principles which inform compensatory support, writing:

[50]      The compensatory basis for relief recognizes that sacrifices made by a recipient spouse in assuming primary childcare and household responsibilities often result in a lower earning potential and fewer future prospects of financial success…

[51]      In addition to acknowledging economic disadvantages suffered by a spouse as a consequence of the marriage or its breakdown, compensatory spousal support may also address economic advantages enjoyed by the other partner as a result of the recipient spouse’s efforts…the doctrine of equitable sharing of the economic consequences of marriage and marriage breakdown underlying compensatory support “seeks to recognize and account for both the economic disadvantages incurred by the spouse who makes such sacrifices and the economic advantages conferred upon the other spouse.”

In Wilson, the Court found that the Claimant experienced disruption of her employment by moving to Halifax while the Respondent trained for submarine service and acted as primary caregiver for the parties’ child for the last five years of the relationship.  In the circumstances, the court found that the claimant suffered a loss of income earning potential by subordinating her needs to those of her family, and, by assuming primary responsibility for the parties’ child, assisted the Respondent in furthering his career.

The Court therefore found the Claimant was entitled to compensatory support of $450.00 a month for four years.

If you would like to book an appointment with any of our family law lawyers, namely Kathleen Sugiyama, Christopher Murphy or Nathan Seaward, please contact Heath Law LLP at 250-753-2202.

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Family Law – Spousal Support in British Columbia

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When a couple is separating, one issue that may need to be addressed is whether one of the people should receive spousal support. Spousal support attempts to meet the needs of a spouse who is financially dependent on the other spouse. A person may apply for spousal support if he or she was married, living together in a marriage-like relationship for at least two years or for less than two years but the couple had a child together. The separating couple may resolve the issue of spousal support by agreement or in Court. The agreement or Court Order may require that one spouse pay support in the form of a regular payment or a lump sum amount.

Are You or Your Spouse Entitled to Spousal Support?

Unlike child support when children are involved, spousal support is not something that always results from a relationship breakdown. The person who is seeking spousal support must first be entitled to receive it. Entitlement is based on the objectives of spousal support, which are to:

  • encourage self-sufficiency;
  • address economic advantages or disadvantages arising from the relationship or the separation;
  • reduce any financial hardship arising from the separation; and
  • address any financial inequality resulting from caring for the children of the relationship.

In considering these objectives and whether a person is entitled to spousal support, the Court will look at:

  • who is responsible for child care and whether this impacts that person’s ability to earn income;
  • decisions that the couple made during the relationship that may have limited career opportunities for one of the spouses; and
  • any economic hardship that resulted from the separation.

Amount and Duration

Once the Court determines that the person seeking spousal support is entitled to receive support, it must determine how much spousal support the person will receive and for how long he or she will receive it. The Spousal Support Advisory Guidelines can help determine the appropriate amount of spousal support. However, the Guidelines are only guidelines and a Court does not have to follow them. The amount and duration of the spousal support will depend on:

  • each spouse’s financial situation;
  • the length of the relationship;
  • the roles that each spouse occupied during the relationship; and
  • whether the spouse seeking spousal support needs any training to become self-sufficient.

Time Limits

A person applying for spousal support under the Family Law Act must do so before two years has passed since either receiving a divorce or, if you were unmarried, since the date of separation.

A person may only apply for spousal support under the Divorce Act if he or she was married. Under the Divorce act, there is no time limit to apply for spousal support.

 

For any further questions regarding a separation or to schedule an appointment with a litigation lawyer, click here.

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My Spouse and I are Separating, When Can We Get a Divorce?

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When Can I Apply for a Divorce?

Many people believe that a divorce can happen overnight. However, getting a divorce can be complicated and does take some time. In Canada, a couple can only get a divorce if there has been a breakdown of the marriage. There are three ways to show that a marriage has broken down: you and your spouse have lived separate and apart for at least one year before you apply for a divorce; adultery; or physical or mental cruelty.

The most common type of divorce is one that results from living separate and apart for one year. It can sometimes be difficult, more time consuming and expensive to prove that your spouse committed adultery or was physically or mentally cruel. If the court finds that you forgave your spouse’s behaviour, you will also be unable to receive a divorce based on adultery or cruelty.

Separation

Sometimes when a couple decides to separate, they may not be able to move into separate houses right away. In some cases, separation can occur while you are still living with your spouse. However, you must not be living as a married couple and you must have the intention to separate. There are a number of factors that may determine whether you are living as a married couple including whether you are sleeping in the same bed, eating meals together, sharing finances, or engaging in activities as a family.

What Else Do I Need to Do to Get a Divorce?

Before you can get a divorce, you must show that you have made reasonable arrangements for the support of your children. “Reasonable arrangements” includes reaching an arrangement for the payment of child support. At the time you apply for a divorce, you may also wish to address how you and your spouse will divide parenting responsibilities, whether spousal support is claimed, and how you and your spouse will divide your property.

 

If you need legal advice on this subject or any other law related inquiry please contact us.

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