Posts by Lana Li

Lana Li
Tuesday, February 16th, 2016    Posted by Lana Li (posts)

As the baby boomer generation see their children move out of the house and settle into their careers and family, some are now re-examining their marriages or long term relationships and considering what they want to do, and with whom, during their retirement years.  According to Statistics Canada (Marital Status Overview: 2011), there were a greater number of divorced and separated couples over the age of 65 in 2011 than in 2006.  A Times article in October 2014 provides that 1 in 4 divorces in the United States are experienced by those over the age of 50 and 1 in 10 divorces are experienced by those over the age of 65.  Given the aging population, it will not be surprising that these statistics are on the rise.

The social and financial impact of “grey” divorces, a phrase coined to refer to the demographic trend of rising divorce rates for older (grey-haired) couples in long term relationships, can be significant.  While the mortgage on the family home may well be paid off by then, the cost of maintaining two households, even if by modest standards, will likely be higher than for one household, coupled with reduced income in retirement years.  One party may require additional homemaker support, assisted living, or a care facility if there are significant health issues, including dementia or Alzheimer’s.  For some couples, there will be less time to rebuild assets given that one or both may be nearing the end of his or her working life.  The cost of health care coverage may be significant if one party loses coverage upon separation or divorce, previously available through the other spouse’s benefits plan.  Pension splitting will need to be considered.  Family businesses may need to be split up and tax considerations will need to be considered.  If there are prior marriages or relationships, competing interests of all of the children or prior spouses may need to be considered.  Life insurance and beneficiary designations must be re-examined.

From the courts’ perspective, it is unlikely that a court will “force” one party to work beyond his or her age of retirement, especially if there are health issues, but it will examine closely one party’s decision to retire early and the reasons for it. Where a party continues to work after the age of 65, a court may consider that he or she will not retire, absent any health or other reasons for not working and the court may require that party to pay, or continue to pay, spousal support based on that expected working income.  A court will only allow “double dipping” (paying spousal support to a spouse from that part of pension income that has already been equalized) in limited circumstances.[1]  Where one spouse’s needs due to dementia can be determined with some mathematical certainty, spousal support can be ordered and such spousal support can be binding upon the payor’s estate.[2]  In some circumstances, spousal support will be refused if the payor requires all of his or her income to pay for care facility costs, the marriage was short, and the division of assets would adequately compensate the other spouse.[3]   Thus, even if there is need of the other spouse, there might not be sufficient income available to pay after the payor’s needs are taken into account.

At the end of the day, those baby boomers who are facing divorce or dissolution of their relationship should obtain legal and financial advice to assist them in navigating these challenging issues.

[1] Boston v Boston, 2001 SCC 43

[2] S.(E.R.) v S(H.C.), 1998 CanLII 4619

[3] W.C.L. v A.J.L, 2003 BCSC 971


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Posted by Lana Li (posts) | Filed under Litigation and ADR | ....
Lana Li
Thursday, May 21st, 2015    Posted by Lana Li (posts)

Under the Family Law Act, S.B.C. 2011, c. 25 (the “FLA”) unless property is “excluded property”, property owned by at least one spouse upon separation is family property and presumptively to be equally divided.  “Excluded property” includes property which is owned by one of the spouses before the relationship began, inheritances to a spouse and gifts to a spouse from a third party (s. 85(1) of the FLA).

In VJR v SKW, 2015 BCSC 593, a husband successfully argued that a $2 million payment to him was a gift, by way of inheritance, from his former employer, with whom he had developed a father-son relationship.  However, upon receiving the $2 million payment, the husband then used the funds to purchase property registered in his wife’s name only and to pay off family debts.  The husband argued that he had just placed the property in the wife’s name to protect him and his family from his creditors and that the wife held the entire property in trust for him.  The wife argued that the husband had gifted the money to her based upon how the property was registered and his use of the money to pay family debt.  The Court held that the husband could not argue that the registration of the property to the wife was to shield him from his creditors and then argue the property was held in trust for him.  The Court would not assist a sham arrangement and help the husband to establish a trust arrangement for his benefit.  It determined that the husband had gifted the property to the wife, such that it was found to be family property, and the net sale proceeds were divided equally between them.  Even if the $2 million payment was “excluded property”, it was significantly unfair not to divide it with the wife as she had contributed to the property, the household, and she had supported the husband for over 10 years, which helped him to develop his relationship with his former employer.

Therefore, if property is “excluded property”, it is best to keep it separate, such as putting the money in a separate bank account, and not use it to purchase family property or pay down family debt.

Lana Li
Friday, April 1st, 2011    Posted by Lana Li (posts)

In companion rulings made February 18, 2011, the Supreme Court of Canada clarified the law relating to property division resulting from the breakdown of a common law relationship: Kerr v Baranow; Vanasse v Séguin, 2011 SCC 10.

The Court first noted that common law partners’ rights were traditionally based on the principles of resulting trust and unjust enrichment.

Under the traditional analysis, a resulting trust can arise in two situations: the gratuitous transfer of property from one partner to the other, or a couple’s joint contribution to the acquisition of property, where title has been registered in the name of only one of them. An unjust enrichment claimant must traditionally establish three distinct elements: an enrichment, a corresponding deprivation, and the absence of a juristic reason for the enrichment.

The Supreme Court rejected common past practice where courts have required the claiming partner to show a direct connection between his or her own financial or other efforts and the acquisition of the property that came to be in the other’s name. It was held that this “fee-for-service” calculation fails to reflect the reality of the lives of many domestic partners and is inconsistent with the inherent flexibility of unjust enrichment and with the courts’ approach to equitable remedies.

The court substituted a more “common sense” analysis for this rigid approach to quantifying compensation, stating at para. 69: “[T]he legal consequences of the breakdown of a domestic relationship should reflect realistically the way people live their lives. It should not impose on them the need to engage in an artificial balance sheet approach which does not reflect the true nature of the relationship”.

The courts should, however, continue to consider if a share of the property should be awarded (using the principle of constructive trust) or whether a monetary award is sufficient. Where a monetary award is to be made, the courts’ “common sense” analysis now requires a consideration of whether or not there was a “joint family venture” to which both partners contributed.
. When examining whether a relationship is a “joint family venture”, the courts are to review the evidence under four broad headings: mutual effort; economic integration; actual intent; and priority of the family. Once the “joint family venture” is established, the courts can then consider the net wealth that has accumulated proportionate to the claimant’s contributions. Thus, there must be a link between contributions and the accumulation of wealth.

In the Kerr case, the plaintiff was unsuccessful in establishing an entitlement to one-half of the wealth accumulated during the relationship. She was not able to show that the defendant had been unjustly enriched at her expense, that their relationship constituted a joint family venture, and that her contributions were linked to the generation of wealth during the relationship.” The parties kept their financial affairs separate.

In the Vanesse case, however, the couple had been working collaboratively towards common goals. They jointly raised children together and acquired wealth together. The court took into account, among other things, their economic integration evinced by a joint bank account and by the property being jointly registered in their names.

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Posted by Lana Li (posts) | Filed under Other | ....
Lana Li
Tuesday, June 8th, 2010    Posted by Lana Li (posts)

According to Statistics Canada, divorce is on the decline but for those who are divorcing, nearly three-quarters of them are using lawyers to help them resolve their marital issues.  In B.C. there were nearly 21,000 active divorce cases in 2008/2009 but only 16% had a statement of defence on file.  This means that only 16% of the active divorce files were litigious or specifically, the other spouse did not agree to the proposed resolution of the marital issues.  However, of those active divorce files in B.C., only 2% of them actually proceeded to a trial in 2008/2009.

Lawyers often act as negotiators or mediators to assist clients with resolving the division of assets, custody of children, access to child, spousal and child support.  Once settled, the agreement is documented in a Separation Agreement, signed by the divorcing couple.  When they get around to filing for a divorce, that is all they will ask for as all other issues have been resolved.  They will obtain an undefended Divorce Order only.  Hence, the low percentage of active divorce files with a statement of defence.

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