Must You Share A Money Gift With Your Ex?

Posted in: FAMILY LAW- Feb 18, 2016 Comments Off on Must You Share A Money Gift With Your Ex?

Your boss gives you a large financial gift. Can your spouse get their hands on it? Normally, no, but you could lose it or a chunk of it.

Our family law has rules for how your property (and debts) are to be divided if you and your spouse split up. For starters, family property (and debts) are to be shared equally – unless the court decides a split down the middle would be significantly unfair.

But some things, like property you each owned before your relationship, and personal inheritances or gifts you get before you separate, don’t count as family property – they’re “excluded property,” which generally isn’t shared (though value increases during the relationship are).

Money or other assets “derived from” excluded property (say, money you get from selling your gift or inheritance) also typically don’t count as family property.

But how you deal with a gift or inheritance that was initially yours alone may (or may not) turn it into family property.

In one recent court case, Henry and Trudy (names changed) started living together in 2003, got married in 2004 and separated nine years later. They lived in Richmond and had three children together.

Henry had been with his employer company since 1997. About two years before he and Trudy separated, he got a large $2 million sum as an inheritance gift from the company’s principal when that wealthy businessman passed away.

Henry was a director of more than 30 companies related to his employer company.

Concerned about his risk as a company director should things go south with any of these companies, he put their Richmond family home in Trudy’s name alone for creditor protection. He agreed in court that this home was family property.

Trudy wanted to move from Richmond to Vancouver. So late 2011 (while still together), the couple used the bulk of Henry’s $2 million inheritance to buy land in Vancouver for a future home. Henry also put that land in Trudy’s name alone, and they started building.

When the couple separated in early 2013, only the new foundation had been constructed. To avoid a $500,000 loss, they completed construction although they were separated. They then sold the Vancouver house essentially at cost, avoiding a loss.

Henry argued the $2 million he’d been gifted, mostly used for the new Vancouver property (and the $2 million from its sale) were excluded property, so shouldn’t be split. But the court decided that when he put the land in Trudy’s name, making it her property for creditor protection, that was a gift to her. It turned the land into family property, so the sale money had to be shared.

Several recent cases have come to different conclusions about what happens after a separation to “excluded property” (or its sale proceeds) transferred between spouses.

This is a tricky area, so see a good family lawyer about who gets what after you and your ex separate.

 

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer

Unequal Division Of Property After You Split

Posted in: FAMILY LAW- Nov 02, 2015 Comments Off on Unequal Division Of Property After You Split

A marriage breakdown is traumatic. And lots of things have to be dealt with after you split – from new living arrangements for you and the kids to the financial fallout.

Speaking of the financial consequences, child support and spousal support may have to be paid.

And then there’s often the thorny question of how you should split your property.

In a recent case, our province’s Supreme Court outlined when an unequal division between ex-spouses may be appropriate. In the process, it also shed light on some of the ways our relatively new family law (in effect since mid-March, 2013) differs from the law before.

In this case, Debbie and Doug (all names changed) lived in a town in the interior of B.C. In the fall of 2005, some six months after they started dating, Debbie moved into Doug’s house with her 8-month-old daughter. From then on, they lived together like married folk, and tied the knot officially in the spring of 2007. In the summer of 2008, they had a son, Josh.

Unfortunately, the marriage didn’t work out. Doug and Debbie separated in January 2010, four years and three months after they started to live together like a married couple.

After first determining Doug’s child support obligations and before turning to spousal support, the court dealt with how the couple’s family property should be split (debts weren’t in dispute).

Under the new family law, the property each of you brings into the relationship is “excluded property.” But if it increases in value during the relationship, the increased value becomes family property.

Here, Doug owned the house when Debbie moved in, and also some company shares. Between the time Debbie moved in and the time she and Doug split up, the house equity went up by some $157,000, and the shares by some $86,000. It was only this increase in value that counted as family property.

The baseline rule now is that you are entitled to a one-half share of all family property (and debts). This is regardless of how these assets are used or your contribution to them.

And under the new law, the court will only move away from the “half-half split” baseline rule if an equal division would be “significantly unfair.” This is a stiffer test than under the previous rules – this unfairness must be compelling or meaningful in light of relevant factors.

Doug argued that his and Debbie’s family property (being the increase in house equity and increase in Doug’s shares) should not be split half-half. He wanted a split of 25% to Debbie and 75% to him.

The court did depart from a half-half split of the family property. A key reason was that the marriage relationship between Doug and Debbie was relatively short – only four years and three months. But it allocated 40% to Debbie and 60% to Doug.

If your marriage ends, you should consult a lawyer if you have questions about financial support and property division.

 

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer

Car Crash? Get Legal Help Early

Posted in: ICBC / INJURY- Nov 02, 2015 Comments Off on Car Crash? Get Legal Help Early

Say you’re hit in a car accident that’s clearly the other side’s fault. You may think there’s no need to get legal help straight away – maybe you won’t even need a lawyer. After all, you’re insured by ICBC, and your case is bulletproof, right?

But consider how things can develop if you go it alone.

In a recent case, Mike (all names changed here) was driving his taxi when he was struck by Pete, who drove through a stop sign. The front of Pete’s car hit Mike’s taxi on the driver’s side, pushing it across the intersection. The door area of Mike’s taxi was damaged.

Mike reported the accident to ICBC a couple of days later. ICBC, which also insured Pete, agreed the accident was Pete’s fault and initially confirmed it would cover Mike’s anticipated claims.

A couple of weeks later, Mike went to see the ICBC adjuster in person to tell his story. (An insured person must make a statement or provide a report about the accident to ICBC within 30 days post-accident.) Mike said he suffered major injuries from the collision. He reported neck, shoulder and lower back pain. He also said he suspected he had post-traumatic stress disorder. He hadn’t gone back to work, saying he was now afraid to drive.

The adjuster had a photo of Mike’s car, showing only minimal damage. At this meeting, he noticed some inconsistencies between the injuries Mike described and his own observations. Mike said he’d walked 30 to 40 blocks to the claims centre, but he wasn’t sweating in his thick coat, and he didn’t have any difficulties sitting through the one-hour meeting.

The adjuster was doubtful about the extent of Mike’s injuries and his claim he couldn’t return to work; he didn’t think Mike’s accident was major. So he hired a private investigator on the spot to conduct surveillance on Mike, expecting Mike would likely start a lawsuit over his claims.

For a few weeks, ICBC did some more work on the file and also interviewed Mike again. Months passed – then ICBC totally rejected Mike’s claims for compensation, arguing he’d made false statements and breached his ICBC policy.

Only then did Mike hire a lawyer, and a lawsuit was started.

Mike’s lawyer wanted to see the private investigator’s report. But ICBC refused to hand it over. The issue the B.C. Court of Appeal court had to decide was whether ICBC had gotten that report to resolve Mike’s claim or, instead, in expectation of a court fight. Also, was the expectation of a lawsuit ICBC’s “dominant purpose” for getting the report?

The court decided the report was “privileged” and ICBC didn’t have to pass it over here. This left Mike and his lawyer in the dark about its contents. Very often such surveillance reports play a critical role in this kind of lawsuit.

If hurt in an accident, see a lawyer early on to protect your rights and help you deal with ICBC from the get-go.

 

This column has been written by Janice Mucalov LL.B as part of “You And The Law”. It provides information only and must not be relied on for legal advice. Names of the parties in reported cases have been changed or removed to protect their identity. Lawyer Janice Mucalov is an award-winning legal writer

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