Saturday, 28 March 2015

Sheltering Income through a Corporation

Clients who own their own business may chose to keep income in the business or corporation. This ultimately affects their true income at tax time. Retaining earnings can become a cause for concern for the recipients of Child or Spousal Support. 

However, Section 18 of the Child Support Guidelines provides a mechanism by which the Court can include as part of a payer’s income the retained earnings in a corporation for which the payer is a shareholder, director or officer. The Court is more likely to do this where the payer is a sole shareholder or director. 

The Court can carry out a similar analysis for Spousal Support.  

The Court should not include in the payer’s income monies needed to maintain the value of the business as viable. 

From the payer’s perspective, if monies are retained by a corporation, there should be good reason and proper documentation for the retained earnings.  From the recipient’s perspective, it is important to look at the corporate finances as well as the payer’s personal income tax returns.  

Saturday, 28 February 2015

Divorce because of Adultery or Abuse

No matter what reasons are sited for the dissolution of the marriage, whether adultery or mental or physical cruelty, Canada's 'No-Fault' divorce regime means that no one needs to prove that either spouse did anything 'wrong' that would cause the breakdown of the marriage: the divorce is no one’s fault.

Generally, allegations of adultery, mental or physical cruelty are only relevant for the purpose of shortening the time that spouses need to be apart before a divorce will be granted by a Judge of the Court. If you are asking for a divorce because of adultery or mental or physical cruelty, your divorce may be processed before the 1 year mark, but you must prove these allegations. This in mind, most people choose to avoid delving into such personal and painful facts if there is no absolute need to do so.

In order to get a divorce all you need to establish is that you have been living separate and apart from your spouse for a period of at least 12 months year and it does not matter which spouse left the marriage or why. It is important to know that you can apply for a divorce at any time after it is established that the relationship is over but the Courts will not sign the Divorce Order until after the 1 year mark.

In Canada, the vast majority of divorces proceed on the basis of the 1-year separation. It is only in the rarest of cases where factors of adultery or cruelty affect property distribution and support outcomes.

Tuesday, 7 August 2012

Same-sex Marriage 101

Gay Marriage in British Columbia
Although we are a law office specializing in Divorce, I am called several times a month by individuals looking for information on marriage, and specifically gay marriage.

First, let me say that in BC, and in Canada, the process for gay marriage and heterosexual marriage is the same:

  1. You do not need to be a resident of BC to be married in BC; but you will need to be a resident for 12 months if you need to file for divorce.
  2. You and your intended partner need to be 19 years of age; otherwise you will require parental consent.
  3. If your divorce was recent, you will need to provide evidence such as a Certificate of Divorce.
  4. If you are planning to get married, but are not divorced – CALL ME!
  5. One of the partners will need to get a marriage license; there are many locations issuing Licenses so visit the Vital Statistics website to find the office nearest you.
  6. The fee is currently of $100.
  7. You will need to present government issued identification for both partners, such as a Birth Certificate or Citizenship Card. Typically, a driver’s license or passport are not accepted.
  8. The license is valid for 3 months only.
  9. If you chose a religious ceremony, ensure that the person conducting the ceremony is registered with Vital Statistics, under the Marriage Act. For a civil marriage, contact a Marriage Commissioner in your city.
  10. Complete a Marriage Registration Form within 48 hours of the ceremony and sent to Vital Statistics so the marriage can be registered, and Vital Statistics will issue a Marriage Certificate.
  11. Keep the Marriage Certificate for your records, of course, and in the event of a divorce, you will be required to submit the Marriage Certificate to the Supreme Court when the divorce application is filed.

Same-sex Marriage Headlines

In the past few weeks, advocates for, and against gay marriage have dominated the headlines, thanks to comments made by Chick-fil-A’s President, Dan Cathy. It seems that this large, Atlanta-based chicken franchise is “very much support of the family” but according to Mr. Cathy, family is the union of Adam and Eve…not “Adam and Steve”.

To make a long story short, due to Mr. Cathy’s strong position against same-sex marriage, there was a boycott of Chick-fil-A restaurants and numerous political leaders spoke out against Mr. Cathy’s views.

On the flipside, supporters by the thousands lined up outside of Chick-fil- A establishments nationwide as a show of their support of Mr. Cathy’s position against same sex-marriages.
Yet, the controversy over gay marriage is not limited to lovers of fried chicken. Only a month before the Chick-fil-A story, the state of Washington and Denmark were making homosexual marriage headlines.

The group Preserve Marriage Washington submitted a petition with over 200,000 signatures and stalled the law that was to come into effect the following day which would allow gay marriage. This would have made Washington only the seventh state to allow gay marriage, but this will have to wait until the November Referendum.  Washington state passed Domestic Partnership laws in 2007 and granted additional rights to same-sex couples in 2009, but marriage is a step that voters at that time were not ready to make.
At the same time, Denmark, where gay marriage became legal in 1989, ordered the state church, the Evangelical Lutheran Church to perform gay marriages, and giving same-sex couples the right and the opportunity to receive the church’s blessing.

Pastors who strongly oppose gay marriage will not be required to perform ceremonies, and already the Danish People’s Party and the Christian Democratic Party have spoken against this new law so only time will tell if the Danes will look to the state of Washington or Mr. Cathy for direction on the issue of same-sex rights.

Friday, 3 August 2012

Miracle on Smithe Street

Tomorrow is a big day for Darlene and Casey*; they are getting married!
They have known each other for a long time and made arrangements for their special day about a year ago. Darlene and Casey thought of everything and this wedding was going to be perfect – if it was to happen at all…

Although Darlene ensured that all the details were covered, there was one small issue which she left to the last minute: her divorce from Brad.
Indeed, as of Thursday, with only two days before the wedding, Darlene was still married to Brad.

Darlene needed a Judge to sign her Divorce Order immediately so that she could get married on Saturday. Darlene and Brad had agreed to waive the appeal period following the Divorce Judgment in anticipation of Darlene’s plan to marry in August.

Fortunately, the Registrars at the Vancouver Supreme Court Registry were kind enough to put Darlene’s Divorce Order in front of a Judge on Thursday morning, and by noon, Darlene was legally eligible to marry Casey.

This is truly a fairy-tale divorce; may Darlene and Brad live happily ever after.

*not their real names

Thursday, 2 August 2012

Can I get an Annulment?

A while ago, a short article ran in the Vancouver Province about Reese Witherspoon’s mother. It seems that Mary Elizabeth Witherspoon filed a Petition in court to have her husband’s second marriage annulled. Mrs. Witherspoon reported that although she has been separated from her husband since 1996, she does not want to divorce him.

Given that John Drake Witherspoon remains married to Mary Elizabeth Witherspoon, his marriage to Tricianne Taylor – the second Mrs. Witherspoon is a void marriage and in Canada, technically, would not require an annulment since it is void ‘ab initi’ -- as if “it never happened”.

None the less, since the second marriage is likely registered, it would be necessary to apply to the Court for an annulment.

In Canada, you would want to ensure that Justice Canada, which keeps track of all marriages and divorces, recognizes that the union was terminated.

In contrast to the Witherspoons’ scenario, some couples seek an annulment on the basis that their marriage is voidable, which is to say, that it is real marriage until the Supreme Court of British Columbia declares otherwise.

Couples can seek an annulment from the Court for any of the following reasons:

  1. The spouses were too young to marry (girls – 12; boys – 14),
  2. Either or both of the spouses were under pressured into the marriage,
  3. One spouse did not disclose to the other his or her inability to have children,
  4. The marriage could not be consummated,
  5. The intent to marry was insincere or otherwise fraudulent.
Until the Supreme Court of British Columbia declares the marriage annulled, the union is legal and binding. However, with only some exceptions, the Court is extremely hesitant to annul marriages.

Given that the divorce process is simple, quick and does not require a court appearance, it may not be worth the effort to seek an annulment of the marriage unless a very strong case can be made for the annulment.

Monday, 9 July 2012

Marriage-Killers - Part 4

In the May 26, 2012 issue of the Vancouver Sun, Tara Carsman and Douglas Todd “embarked upon a highly unscientific study” to find out what academics, counsellors and divorce survivors thought were the Marriage-Killers. In the May 26, 2012 issue of the Vancouver Sun, Tara Carsman and Douglas Todd “embarked upon a highly unscientific study” to find out what academics, counsellors and divorce survivors thought were the Marriage-Killers. Not surprisingly, a lack of connection was one of the top culprits.

A constant state of conflict, even arguing over small issues, slowly but eventually reduces the intimacy in the relationship. Although this in itself is not the cause of the breakdown of the marriage, “it undermines the connection, the glue that keeps people together”, suggests relationship counsellor, John Bolland.
Ironically, Mr. Bolland points out that another Marriage-Killer is ‘avoiding conflict’. He goes on to explain that avoiding conflict can lead to disconnection. So “if there’s tension, it’s best to bring it up”, deal with it and move.

A successful marriage requires a couple to enjoy common interests and fun activities together; a chance to reconnect over something other than parenting and paying bills. The key to having fun together is to find pastimes that are mutually entertaining, rather than pushing one spouse to learn to enjoy the hobbies and prefer adventures of the other.
I would offer that searching for things to be done together, enjoyably, can be its own exercise in personal growth, and allows spouses to become further ‘tuned in’ to the needs and wants of the other spouse.

And while on the topic of “Connectivity”, I would like to add in another Marriage-Killer: children!
Although Ms. Carsman and Mr. Todd separate ‘Lack of Connection’ and ‘Child-centric Relationships’, I think that they are intricately interwoven. According to John Boland, a child-centered family is at the top of his list of “ways to mess up”. The relationship of the spouses becomes secondary to the needs of the children. I suspect that such Child-centric parents are not spending time together as a couple only since they are busy being parents.

The greatest challenge to couples with children is finding the perfect balance of doting parent and attentive partner. ..if there is a perfect balance.