Podcast: How Assets are Divided in a Divorce in Ontario
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In this transcribed interview with Dale Goldhawk of Zoomer Radio AM740 in Toronto, family and Toronto divorce lawyer Lorne Fine of Fine & Associates Professional Corporation offers advice on how assets are divided in a divorce in Ontario. Read the interview below, or listen to the podcast at the bottom of the page.
Goldhawk Fights Back Podcast: Recorded September 30, 2013
Dale: OK, it’s 12:18 on Zoomer Radio and my guest is Lorne Fine. He’s our “Goldhawk Fights Back” family and divorce lawyer. Lorne, always great to see you here in the studio.
Lorne: Oh, thank you, thank you for having me.
Dale: I was talking earlier about when love disappears, when love takes flight, and spouses, couples who have been together, decide to go their separate ways. One of the big issues, and we haven’t talked about this specifically, just this point, focusing in on this, what happens to the possessions of the marriage, the stuff?
Lorne: The stuff, the property.
Dale: Yeah. What, how, what principals are at play here that would help dictate how that goes?
Lorne: OK. People are usually under the mistaken impression that it’s just 50/50, divide it down the middle, let’s cut the pie in half and let’s go our separate ways.
Dale: Yeah.
Lorne: If it was that easy, you wouldn’t need a lawyer.
Dale: You’d be out of work. OK. All right.
Lorne: And so, and so, you know, it’s not that easy.
Dale: No.
Lorne: And there’s all kinds of rules, and there’s all kinds of exceptions, and so on. And really, I guess, to make it very simplistic and very broad, you’re basically dividing the increase in your net worth from the date of marriage to the date of separation, you’re dividing the difference. So, if one party’s net worth goes up by $100, the other party goes up by $50, the difference is $50, and so the person with the higher net worth cuts a check to the person with the lower net worth for $25. The difference was 50, so you both end up with 75.
Dale: So you share in the increase in net worth in the family during the marriage.
Lorne: Right, but there’s all kind of rules.
Dale: OK. What about the ru-, can we go back to the rule about the house? What happens to the house?
Lorne: The house. OK. So that’s a very special rule.
Dale: Yeah.
Lorne: And like I said, you’re sharing in the difference in the increase of your net worth from the date of marriage to the date of separation, so if you had RSPs of, say, $100 on the date of marriage, and the RSPs increased to say $1,000 on the date of separation, you’re sharing the increase which is $900 from the date of marriage to the date of separation. Right? But a house is different. How it’s different is as follows. The house you don’t get a date of marriage deduction, so if your house is worth, say the equity in your house is $100,000 on the date of marriage and increases to $300,000 on the date of separation, it’s increased by $200,000 but you don’t get the date of marriage deduction. So you’re sharing 300,000 and not 200,000.
Dale: So you’ve got a house and you marry somebody, the day you marry them, the other person owns 50 percent of the house.
Lorne: Well, not necessarily, but, but…
Dale: I mean, that’s kind of a negative way of looking at it, but…
Lorne: Yeah.
Dale: …I mean, that’s, in principal, that makes no sense.
Lorne: Well, that’s why people have marriage contracts.
Dale: Yes, yes.
Lorne: That’s why people say “I’m bringing a house into the relationship. I love you, but if something happens…”
Dale: But not quite that much.
Lorne: Well, it’s, you know, hope for the best and plan for the worst, right? OK. So, “I love you, but just in case, we need to have a marriage contact that if we separate the house is mine, because I brought it in, and I should take it out.” You know, maybe you can put something in to the contract that, you know, if, let’s say, the husband brings in a house. So if the wife makes a financial contribution, you know, that should be part of the agreement. Let’s say she pays down the mortgage. So she should benefit to that, but that’s why marriage contacts are important, cohabitation agreements. That’s why people…
Dale: Yeah but go back into that whole issue about whether or not you should have one. And I guess it depends in part on what you’ve got, does it not, how much stuff you’ve got?
Lorne: Well, if you don’t have anything, you don’t need it.
Dale: What do you need it for?
Lorne: Right.
Dale: But that rule still applies, right? In the absence of a marriage contract or anything else, that house at the time of disembarkation…
Lorne: Yes, dissolution.
Dale: … is essentially 50 percent owned by each partner, essentially.
Lorne: OK.
Dale: I mean, there could be arguments around that.
Lorne: OK. Essentially, yes. OK.
Dale: Well, that’s the special rule you talked about.
Lorne: It’s a special rule, right. And so, that’s why… so it’s just the house we’re talking about.
Dale: Yeah.
Lorne: That’s special property.
Dale: Yeah.
Lorne: And other assets, as I said, you get the date of marriage deduction, but for a house, you don’t. So, it’s important to protect that asset.
Dale: OK. What about a cottage? Is it only a primary residence, or all?
Lorne: Well, you could have more than one matrimonial home.
Dale: OK.
Lorne: So if you have, let’s say you have a primary residence, and let’s say you go to the cottage every weekend, right, and you go there on holidays, and you go there, you use it quite often. You could have two matrimonial homes.
Dale: OK.
Lorne: Then you’re really out of luck, right?
Dale: So the important, it means, it means the 50 percent, well, depends on which spouse you are. It means the 50 percent split would, in theory, apply to both residences, not just one.
Lorne: Both. That’s right. Yeah, so you have to have an agreement. The only way to get around it, the only way to get around that is to have an agreement to deal with what if, what happens when you separate.
Dale: Is that a large, when you look back at all the cases you’ve been involved in, is that separation, disposal of the house, one of the biggest issues, or because of that rule, is it fairly, fairly routine, knowing that nothing in law is necessarily routine?
Lorne: Well, you know, for the majority of the population, their primary asset is their house…
Dale: Yeah.
Lorne: …and their pension. So that’s the big assets, big ticket items. So, a house, you know, you get into difficulties when, let’s say, one party brings a house into the marriage, that’s one issue, lets, you have, say, a very short term relationship, so somebody brings a house into the marriage and they’re married for six months a year, and the other spouse says, “I want half the house.”
Dale: Yeah. OK. Well, you’ve seen that before.
Lorne: Oh yes.
Dale: Of course.
Lorne: Yeah, I’ve seen six week, right?
Dale: Oh my goodness.
Lorne: Yeah, I’ve seen a month, right? “I want half the house.”
Dale: What about the furniture?
Lorne: Oh, you don’t want a lawyer arguing over, you don’t want a lawyer arguing for furniture.
Dale: No, but I’m just saying, if it’s a highly contentious thing, especially in that six month special, or six weeks, did you say?
Lorne: Yeah, yeah.
Dale: Does the 50 percent extend to the furniture?
Lorne: Well, it’s, OK. We’ll talk about furniture.
Dale: It’s a debatable point. It’s a moot point, though, isn’t it?
Lorne: Well, if you bring furniture into the marriage, then that’s technically… and it’s a short term marriage, it’s your furniture. It’s not like your furniture, furniture does not increase in value.
Dale: No.
Lorne: Furniture decreases in value, right?
Dale: No. Of course. Yeah.
Lorne: It’s not, it’s hardly an asset. So when it comes to dividing stuff like that, you really don’t want your lawyer to start arguing with the other lawyer about couches and chairs.
Dale: Yeah, but I bet you hear that all the time, where it’s like…
Lorne: Yeah, people…
Dale: …where a client wants you to fight for the Chesterfield or something.
Lorne: Well, it’s usually tools. Tools are very emotionally…
Dale: Tools?
Lorne: Tools are very emotional for people.
Dale: Yeah, “That power drill belongs to me.” Right?
Lorne: Snap-on tools. People love their tools.
Dale: Really? Yeah.
Lorne: Yeah. So they get very hot and heavy about it.
Dale: Well, why would a wife want Snap-on tools if they [SP]…
Lorne: It’s just a job you know?
Dale: Just to… Yeah. What other kinds of property, OK, so we’ve gone through the house thing…
Lorne: Property is very broad. It can be anything. It can be, let’s say, it can be air…
Dale: A car.
Lorne: A car. It can be air miles. It can be collectibles. You know, I have a client who has a sports memorabilia collection, right?
Dale: Yeah.
Lorne: And it’s very, it’s a significant value, right? It could be art.
Dale: And he wants to keep it and she wants it?
Lorne: Yeah. We, everyone debates what’s the value of it.
Dale: Oh, yeah.
Lorne: Comic book collections. I have guys that have valuable comic books, like you’d be shocked how much some of these comic books would be worth. Right? And , you know, one guy’s been collecting since he was a kid, and he has, like, the first edition of…
Dale: Yeah.
Lorne: …yeah, like, I don’t know, the Avengers or something, and it’s a very valuable comic book. It’s in pristine condition, so there’s all kinds of things.
Dale: But you’re hinting at a huge problem here, perhaps, and that’s how do you value some of these things, right?
Lorne: Right. So a lot of times it’s difficult to value, and you need to hire an expert. You need to go like, for the comic book collection, right…
Dale: You go to a…
Lorne: …we went to someone who was an expert about comics and said “How much is this collection worth?”
Dale: Yeah.
Lorne: And they have to go and value it. Art. Right? We have to go to an appraiser. How much is this art collection worth? Either you can divide, like comic books you can’t really divide, “I’ll take the Avengers, you take Superman,” you know.
Dale: Yeah, right. Exactly.
Lorne: The wife doesn’t want the comic books. She wants the value.
Dale: Or Dick Tracy, now that’d be good.
Lorne: That would be good, yeah. But something like art, it’s possible to trade off, “I’ll take this picture, you take that picture.”
Dale: Yeah.
Lorne: You know, something to that effect. But a lot of times, for instance, a business. Right? When somebody has a business on date of separation, we have to go out and hire somebody called a certified business valuator, who knows about family law, and he or she has to value this business. How much is this business worth? Because it forms part of the spouses’ net family property, and that’s a subjective valuation, right? And the wife may get an expert and say, “That’s not the value, it’s some other value.”
Dale: But the wife might have an argument, or the husband for that matter might have an argument, that the spouse participated in the business, and of course, probably had some sweat equity in it, and would have a larger claim…
Lorne: Could.
Dale: …on splitting it up than otherwise.
Lorne: Or that could go to support.
Dale: Yeah.
Lorne: It could go to spousal support. So there’s all kinds of rules. And there’s, what I didn’t touch on, which I probably should, briefly, is excluded properties.
Dale: OK.
Lorne: There’s inheritances, so if you inherit money during the course of the marriage, and on date of separation, you still have that inheritance. Let’s say you take the inheritance, you put it in your own bank account, not a joint account, and that account, those moneys still exist on the date of separation, the other spouse does not share in that. So that happens quite often, where you have to trace the inheritance coming into the relationship, and where it went on the date of separation.
Dale: I know from our wills and estates lawyer it’s also wise to make sure that you write it into your will that the inheritance, money, goods, whatever…
Lorne: Right.
Dale: …don’t translate to the in-law.
Lorne: Right.
Dale: Yeah. Stop at that. OK. So that’s excluded?
Lorne: That’s excluded.
Dale: All right.
Lorne: Major gifts. Let’s say one spouse gets, and it happens quite often, one spouse gets money from their family, $100,000, let’s say an advance on an inheritance, or a major gift, for whatever reason. If that money is still distinct and separate on the date of separation, that’s excluded. So the other spouse doesn’t share in that. Damages for personal injury. Happens quite often, right? One spouse gets injured during the course of the marriage. Has a significant amount of damages. Where do those damages go? If they still exist on the date of separation, and you can show they still exist in a trace, the other spouse doesn’t share in that property.
Dale: What about bank accounts? How does that work?
Lorne: If it’s a joint bank account, then it’s shared equally.
Dale: Yeah, but if it isn’t?
Lorne: If it’s not, then it’s part of your net family property. If it’s your bank account, it goes on your side of the ledger, it’s your asset, it’s part of your net worth.
Dale: It would figure in to the negotiations.
Lorne: Figure in to the calculation. That’s right.
Dale: Yeah, OK. What about if you’ve been living common law? Does any of this apply?
Lorne: Well, that’s a good question. So, for married couples, when they separate, the division of property is, there’s rules and it’s all set out in the Family Law Act. You can review the Family Law Act, and there are certain rules and regulations dealing with how to divide property.
Dale: Right.
Lorne: But when you’re common law, there’s no hard and fast rules. OK? The same rules for married spouses don’t necessarily apply to common law spouses. There’s something called a joint family venture, where a judge would look at how the common law couple conducted themselves. Did they conduct themselves like a married couple? Did they pool their assets? Did they pool their income? But it’s much more complicated.
Dale: So there’s an argument, but it’s hard, it’s not as cut and dried as if…
Lorne: It’s not as cut and dried. Common law is much more difficult. The law’s evolving, because there’s so many common law couples.
Dale: Yeah.
Lorne: There’s more and more common law couples, and they’re separating.
Dale: Yeah.
Lorne: Just like same-sex couples.
Dale: Of course.
Lorne: And so, the law is evolving, and it probably, the law is probably going to change to either have the same rules apply or some form of the rules for married couples apply to common law couples.
Dale: Is this an argument for getting married rather than just living together?
Lorne: No, it’s probably an argument not to get married, because it’s a harder argument to argue about division of property when you’re common law.
Dale: Well, because there aren’t as many arguments to be had if you simply dissolve a relationship rather than a marriage, but like I was saying…
Lorne: Right. But some of the very big cases…
Dale: But certain… but those could be very unfair situations nonetheless.
Lorne: They could be. Right.
Dale: A very rich woman and a very poor guy.
Lorne: Right. Well, some of the huge cases that went to the supreme court of Canada dealt with common law couples. These farm couples, right?
Dale: Yeah.
Lorne: Where they didn’t get married, and they had a farm, and they lived together for many years, and they had kids and then one day their farm is worth millions and millions and millions of dollars.
Dale: Yes, yes, yes.
Lorne: And the farmer says, “Thank you, see you later.”
Dale: Oh, no.
Lorne: And the wife says, “I don’t think so.” And so, they went right to the supreme court in Canada, there’s all kinds of tests and trust claims and so, on, “What did the wife, common law wife contribute to the relationship?”
Dale: Yeah.
Lorne: So, some of the big cases were as a result of common law couples, right? Like I said, these farm couples, right?
Dale: Yeah. Yeah.
Lorne: And so, it’s more complicated, the rules, with respect to common law couples.
Recording: “Goldhawk Fights Back for You” airs Monday through Friday 11:00 to 1:00 on AM740 Zoomer Radio.
Dale: 12:36. Lorne Fine is here, answering your [SP] questions about family law, divorce court proceedings. We’ve been talking about how you divide up the stuff in a marriage, the property. 416-360-0740 or 866-740-4740 if you have a question. Here’s Erica, calling on her cell phone. Erica, what’s your question?
Erica: Hi, good afternoon, Dale. My question for Lorne is, I know of a young couple that decided to move in together and purchase a home, stayed together for one year, and then decided to split. Are they classified common law because they purchased the home together financially or is there a time involved in there somewhere to say that after two years you become common law, therefore everything gets split?
Lorne: So common law is three years, you’re together in a permanent relationship for three years, or if you have a kid together.
Erica: It doesn’t matter whether you purchased a house together or not, that’s just a financial arrangement?
Lorne: Right. Right. So they bought the house jointly together?
Erica: They bought the house jointly together. Each put down X number of dollars…
Lorne: Right.
Erica: …and then a year later, split unfortunately, because it didn’t work out.
Lorne: Right. So, they’re not common law, but it’s kind of difficult because if the house is jointly owned and one party contributes more than the other party, it’s going to be problematic. That’s why an agreement is so important in that type of situation, exactly for that reason.
Erica: OK. So, what does… would the individual that put more down on the house be entitled to that amount back?
Lorne: Not necessarily.
Erica: Not necessarily?
Lorne: Nope.
Dale: It’ll be touch to argue, because it’s only one year. That just makes the whole thing more difficult, Lorne?
Lorne: It’s easier, because it’s a shorter duration…
Dale: Yeah.
Erica: Right.
Lorne: …but what makes things difficult is, if the house is jointly owned, and say, the husband, or the man, puts in 100,000, and the wife puts in 25,000, and the house is jointly owned, realistically, they both own half of the house. And the wife’s going to say, “He gave me a gift of half the house,” Right? “That’s why we did it.” Otherwise he would have had an agreement, or otherwise he would have owned the whole thing solely in his name, or he would have had, there would have been a marriage contract, or a cohabitation agreement. So, it makes things difficult when you have title that’s jointly held.
Dale: Have the, this young couple that, you know, Erica, have they gone to their lawyers yet, or are they just thinking about this?
Erica: Oh, they’ve already done and separated and sold the house.
Dale: Oh.
Erica: And they’re both on their own right now.
Dale: Oh. So it’s a moot point at best?
Erica: Yeah, it’s a moot point, but I was just wondering about what the common law laws are in the province, because I remember looking on the Internet and, in the province of Ontario, when you cohabitate for two years, the Internet says that you are legally common law at that point, entitled to half of everything.
Dale: You say two years. Do I hear three? Yes. Lorne Fine said three.
Lorne: See, the Internet is a wonderful thing, but it’s very enlightening, but it’s not always right, so, you know.
Erica: Well, this is why I look to experts like you for the correct answer.
Dale: There you go.
Lorne: Oh, thank you. Thank you.
Dale: Well, you know, it’s three years.
Lorne: It’s three years, but you should go on to a lawyer’s website.
Erica: Right.
Lorne: Don’t look on some, you know, go on a law firm’s website.
Dale: Don’t go to “Uncle Bob’s Law Shop” or something like that.
Lorne: Exactly. Exactly.
Erica: Well, this is actually a government website that I went onto, called…
Dale: Oh, well that doesn’t…
Erica: ...what common law is.
Dale: That doesn’t automatically make it correct, does it?
Erica: You know what? Absolutely not.
Dale: Erica, thanks.
Erica: Thank you very much for your answers.
Lorne: OK.
Dale: OK.
Lorne: Take care.
Erica: Have a great day.
Lorne: You too.
Dale: All right. Three years and you’re common law. Is that consistent with the other provinces?
Lorne: I don’t…
Dale: Or can it be different?
Lorne: …I really, I’m not sure…
Dale: I’m thinking about Quebec, and I wonder…
Lorne: I really don’t know.
Dale: …if it’s different in Quebec. Where in fact a great deal, I think proportionately, many, many more people live common law…
Lorne: Common law much more. Quebec is totally separate, totally different, they have…
Dale: Well, it’s a whole different code [is it]? Exactly.
Lorne: A whole different world. Yes. Whole different code, different world.
Dale: Yeah. OK. Here’s Ushi [SP], calling from Toronto. Ushi, do you have a question?
C: Yes, I was common law for more than five and a half years. I borrowed on my city house to buy the house in Mississauga. I paid half of the sailboat, $31,000 for my sailboat. I got a court order to collect but he disappeared on me.
Dale: OK. A court order to collect on what?
C: Well, the thing is, when the house was sold in Mississauga, he claimed he could get money out of it, but he owed his lawyer money. His first wife had a lien against our Mississauga house, and I put up most of the money, because I borrowed on my city house. And I also paid half for the sailboat. And my lawyer said, at the other time, “Go find your other half of the sailboat, ha ha ha.”
Dale: OK.
C: But I don’t know if I can still go after him or not.
Dale: Your lawyer said that? Your lawyer said that?
C: Yeah.
Lorne: Oh, jeez.
C: Well, he was, I got him through legal aid, but I had switched lawyers because we also had a bad case, my ex used to beat up on me and he was very angry because he was found guilty of beating me up.
Dale: Oh. OK. So you have a court, is your question that you have a court order that you can’t enforce?
C: Yeah, is there a way to still enforce it even though this happened quite a few years back? Because I know when he went on holiday on our sailboat with his girlfriend, my lawyer said, “Xerox everything.” I’ve got about eight boxes full of stuff, I don’t know where the money came from, but he had tons of money everywhere. And I tried, I actually work for a bank, so I tried to, you know, follow up on some of this money but I had no luck. And everybody says, “Well you got to, you know, it’s going to be expensive to try to hire a, what is it, like a… “
Dale: Private detective.
C: “…detective agent and all that.”
Dale: Yeah. Yeah.
Lorne: So if you have a court order, a court order doesn’t expire. You can take the court order, and you should probably go see a lawyer, and…
C: Oh, I’m going to take a lawyer on.
Dale: Yeah.
C: I’m going to get a lawyer with teeth.
Dale: That’s a good idea.
C: Maybe I’ll call you people. I’m not kidding, because I’m in the poor house, and I had to borrow against, I borrowed $91,000 from my city house.
Dale: But the bottom line here is, Ushi, you’re saying that you have a court order, so you needed a lawyer to assist you in enforcing that.
Lorne: Right.
C: Oh, absolutely. Because I can’t go, like, it was so stressful, I didn’t even want to do anything anymore for many years, because I talked to his daughter, who became a lawyer, or was studying law, and she said talk to his first wife. And he pulled all kinds of dirty tricks where he didn’t show up in court…
Dale: Well, that’s why you need a lawyer to be representing you.
C: Oh, absolutely. I agree with you 100 percent.
Lorne: You need a lawyer to help you, because like you said, it’s very stressful.
C: Oh, it’s horrible. I ended up renovating my house and I ended up being a landlord.
Lorne: Right. And it’s…
C: I should not have to deal with a crap… [SS]…
Dale: Hang on a sec, Ushi, and maybe Lorne Fine can give you some good advice.
Lorne: OK. So, people, this is for everyone.
Dale: Yeah.
Lorne: The point of having a lawyer is a lawyer’s objective. A lawyer’s not emotionally involved.
C: Right.
Lorne: A lawyer’s going to give you the best advice he or she has.
C: OK.
Lorne: And a lawyer, you know, should know his way around a court and his way around, or her way around, the family law act, and the divorce act. And help you achieve the best results you can. So when you have a court order…
C: I do.
Lorne: …there’s numerous ways you can enforce the moneys that are owing.
C: Yes.
Lorne: You can get a writ of seizure and sale.
C: Right.
Lorne: You can garnish his wages, you can garnish his bank account. You can get a writ, and you file it with the land registry, and he can never deal with any property again. He can’t mortgage or sell a property without paying you off.
C: Yeah.
Lorne: So, go see a lawyer.
C: I was a nervous wreck after all that stuff I went through.
Dale: Really, yeah.
Lorne: And if there’s equity in the boat, you can take the boat. I’ve done that before, I’ve taken people’s boats.
C: Really?
Lorne: Yeah. I’ve taken people’s boats.
C: Because a friend of mine offered to take the boat… [SS]…
Dale: Well, not personally. You don’t hop on board.
Lorne: Yeah, I went and picked up, I went and picked up the, no, I actually went and, I actually got an order, I had money that I, and the husband owed our client money…
Dale: Yeah.
Lorne: …and we went and locked up the boat.
Dale: Just like that.
C: Oh, I wish I’d talked to you years ago, but I didn’t listen to this program for quite a while.
Lorne: You know, what, people are very, you can have something called a judgment debtors examination, where you go…
C: Let me write that down, because I’m going to forget what you just said. That’s very important.
Dale: Well then, go ahead, Lorne.
Lorne: There’s something called a judgment debtor examination, where you go, you get a judgment against somebody, and you can go and examine them, you say, “What do you have, let’s examine you and each and every thing you have.” I had one guy…
C: See, the thing is, he never did the financial statement, but he did, my lawyer did, but he never did.
Dale: Ushi, the first thing you’ve got to do, and this is advice not from the lawyer but from the mere mortal, you’ve got to get yourself a good lawyer.
C: Yeah, no, I agree with you, a hundred percent. I need a lawyer.
Dale: Ushi, thanks very much. I hope that advice guides you on your way. Something like that, that sounds incredibly complicated and fairly serious, amounts of money involved, this really isn’t something that as a party to the divorce, you can deal with yourself, I’m assuming.
Lorne: It’s very difficult. Very difficult. You know, it’s emotionally draining, you don’t know really what you’re doing, it sounds like her former spouse was running circles around her, wasn’t cooperating. That’s why you need a lawyer to come in and help you out. It’s unfortunate, sounds like she’s had a rough time.
Dale: But, having the court order in her possession, she’s at least partway down the road.
Lorne: Partway, but it doesn’t sound like, the court order may be a fraction of what’s really owing to her, right?
Dale: Yeah. Exactly.
Lorne: If the husband probably… it sounds like he’s concealed assets and so on, and that’s why you need a lawyer to help out.
Recording: “Goldhawk Fights Back for You” airs Monday to Friday 11:00 to 1:00 on AM740 Zoomer Radio.
Dale: OK. It’s 12:50 here on Zoomer Radio, where the numbers, if you have a question for our family court lawyer Lorne Fine, give us a call. 416-360-0740 or 866-740-4740. We’ve been talking, and I’ve been quizzing Lorne, about how property is divided. Have we missed any major area of property that would figure into a divorce proceeding?
Lorne: Well, there’s preservation orders, which is important. When you start off, we talked about, the last call, you know, the husband was concealing assets, doesn’t sound like he was cooperating, and so on. So, when you start a proceeding, you start negotiating, a lot of times it’s important to go and get a court order freezing everything, right? To freeze the assets. Freeze the bank accounts. Register something called a designation of matrimonial home, which freezes the house. Let’s say the house is owned by one spouse, right?
Dale: Yeah.
Lorne: You don’t want the spouse to do something fraudulent.
Dale: Run off and sell it, yeah.
Lorne: Well, it would be fraudulent to do that, but it’s possible, right?
Dale: Well, it doesn’t mean he couldn’t do it.
Lorne: That’s right, he could do it. So that’s something so easy, called a designation of matrimonial home.
Dale: And that freezes everything until you can deal with it.
Lorne: Freezes the house. You can’t do it, because it’s a piece of paper you get, you register on title, and so it’s noticed to anybody who’s looking at title, that it’s a matrimonial home.
Dale: That might be important, that might be a good reason, then, to consult a lawyer about these things, who specializes in family law, and not “check on the Internet to find out what you should be doing.”
Lorne: Yes. Or years later say, you know, “I got an order, I’ve got nothing to do, how do I enforce it?”
Dale: Yeah. Yeah.
Lorne: It’s just a piece of paper. If you can’t enforce it, it’s not worth anything.
Dale: Yeah, although you need the piece of paper to start.
Lorne: You do need the piece of paper, but maybe if she would’ve got a designation to start off, if she would’ve got a court order freezing all the assets, then the husband couldn’t do anything. Or you get an order, you give it to the banks, and you say, “This guy can’t deal with his bank accounts.”
Dale: Right.
Lorne: “This guy can’t do anything until we get a court order.” So, it’s important to take those first steps, those initial steps.
Dale: Here’s Kathy on the line from Stouffville. Kathy, do you have a question?
Kathy: Hi, yes, thanks for taking my call.
Dale: Sure.
Kathy: I’m in a 20-year common law situation, and my husband is an alcoholic. And things are going downhill. He’s already been put in jail and lost his license for a couple of years for one DUI, and he’s starting to drink and drive again. So, is there anything I can do to protect my stuff, or my half of whatever, or how would they view that?
Lorne: So you want to, you don’t necessarily want to separate?
Kathy: Not at this point.
Lorne: OK. And so, what are you looking to protect?
Kathy: I’m not sure whether, say he gets into an accident while drinking and driving, and kills somebody, kills himself, can the courts take away my half of the house, or we have my family cottage, to which he has a third, can they take away that as well?
Lorne: Well, God forbid if he kills anybody, or he’s liable to anybody for an amount that exceeds whatever his insurance cost is…
Kathy: I don’t know if his insurance would be intact if he’s drinking and driving.
Lorne: I guess, if he’s drinking it’s not.
Dale: Without a valid license, his…
Kathy: Oh no, he has a valid license.
Lorne: No, but if he’s drunk, his insurance probably won’t cover it.
Kathy: Yeah, the insurance might get cancelled.
Lorne: So yes, the property is, there’s exposure there. So, again, it’s… [SS 00:28:13]
Dale: So Kathy really wants to know how would protect herself in this kind of relationship against something like that happening. Is there anything?
Kathy: Is there anything to do?
Lorne: Well, it’s always best for him not to own anything.
Kathy: So try and get him to put it in my name, but that’s impossible.
Dale: Yeah, but that ship has sailed.
Kathy: Yes, exactly.
Lorne: Yes, it’s very difficult.
Dale: Yeah.
Lorne: What’s she going to do? , you know, if you sever a joint tenancy, then all that does is he owns property, has tenants in common [SP]. That still exposes his interests. They’re not going to, it’s not your interests that are exposed, it’s your interest, you had nothing to do with it. But, you know, you have to seriously consider counseling and try to help your husband now.
Kathy: We’ve tried that.
Dale: Yeah.
Lorne: Uh-huh.
Kathy: Tried everything.
Dale: Well maybe, it wouldn’t, would it be a reasonable idea Lorne, for Kathy to just go and talk to a family court lawyer, to see what her options might be, looking at her case specifically?
Lorne: Well, it, a lawyer’s only going to tell you what’s going to happen if you separate.
Kathy: Yeah.
Dale: Yeah.
Lorne: How the property’s going to be divided when you separate. You’re saying you still want to stay married, but how, you want to creditor-proof yourself.
Dale: Well, they’re not married, they’re living common law.
Lorne: Or common law, still.
Kathy: Common law, yeah.
Lorne: You want to credit-proof yourself against any creditors that he may have in the future because of his negligence.
Dale: Yeah.
Lorne: Right, that’s what you’re looking for.
Dale: Yeah.
Kathy: Yeah.
Lorne: So, it’s not your assets that are going to be exposed, it’s his assets.
Kathy: OK, so they can’t take my half of the home, is that correct?
Lorne: Yeah, it’s not your, it’s not his house.
Kathy: Right. But I would still have to sell the house in order for him to get his half of the money out?
Lorne: Why don’t you, instead of worrying about that, I think the most important thing is for him to get help.
Kathy: Oh, definitely.
Lorne: I think that’s what you should be more concerned about, more than anything.
Kathy: He’s already been to Bellwood Retreat for 30 days. We’ve been through the whole gambit.
Dale: Yeah.
Lorne: Uh-huh. So, well, this is, you know, these are choices that you have to make…
Kathy: Yeah, OK.
Lorne: …about how you want to proceed in your relationship, but that’s probably your primary concern right now, not so much creditor-proofing yourself.
Dale: Yeah.
Lorne: You know, if he’s drinking and driving, that’s serious, and it’s dangerous.
Kathy: Yeah.
Lorne: And, you know, you don’t want, you can’t stop somebody from naming you as a party, right?
Kathy: OK.
Lorne: Somebody may say you’re a defendant.
Kathy: Mm-hmm.
Lorne: Sue you for whatever reason. So, just because your husband does something stupid, doesn’t mean that you can’t also be sued. And then you have to defend yourself.
Kathy: Yeah.
Lorne: So anybody can sue anybody for anything. But, you know, you just have to, maybe you should consult with a lawyer and bring all of your details about your assets and liabilities, and speak to a lawyer.
Kathy: OK.
Dale: All right Kathy, thanks very much. I hope that helps. At least if a lawyer could look at everything, give her a clearer picture of…
Lorne: Of course, you never know. She doesn’t want, she doesn’t want to separate, she wants to stay together, but she’s…
Dale: Yeah, I know. Well, but that’s what happens with human relationships, right? You have a practical side, you have a personal side, and you try to make all of that work together and, at the end of the day, still protect yourself.
Lorne: Right. Yeah.
Dale: Here is Mary on the line from Barrie. Mary, what’s your question?
Mary: Hi, I’d like to know how I can protect my half of an estate built up in 31 years of marriage, because my husband’s will doesn’t seem to be protecting me.
Lorne: So, you still want to stay together but you’re concerned that your husband’s will doesn’t specify that you’re a beneficiary?
Mary: It doesn’t give me what I deserve, and we have two companies, a US and a Canadian one…
Lorne: Yes.
Mary: …which I’ve been with him when we started them both.
Lorne: Yes.
Mary: I’ve never been an employee. I worked and got paid for what I did.
Dale: Now Mary, I’m going to run out of time if we don’t come to some bottom lines here.
Mary: What can I do to…
Dale: You’ve seen the will and you’re not in it the way you think you should be in it, is that what you’re saying?
Mary: Yeah.
Lorne: Yeah, I’ll cut to the chase.
Dale: Yeah.
Mary: Yeah.
Lorne: So when somebody dies, the other spouse elects either to take under the will, or they elect to take pursuant to the Family Law Act, as if they got divorced. So if your husband didn’t provide for you in the will, you can say, “I’m electing to take under the Family Law Act, and there’ll be a division of net family property as if you’re separating.
Dale: Yeah.
Lorne: And that will be determined.
Mary: But I can’t do that before he dies, or I die? I can’t do anything about this…
Lorne: You can’t do anything, if you’re still going to stay together, you want to stay together, is that what you’re saying?
Mary: I don’t know. I’m very confused at the moment.
Lorne: OK. If you want to separate, that’s one thing.
Mary: Uh-huh.
Lorne: You would go see a lawyer, and you would deal with the division of property…
Mary: Right.
Lorne: …like any separating couple. You have two companies, even if he’s a shareholder of these companies, you have an interest in these companies.
Mary: I, yes. I’m not a shareholder, but I started with them.
Lorne: Or if he’s a shareholder, you have an interest in these companies.
Mary: OK.
Dale: Mary, I hope that helps. Once again, people in difficult relationships, trying to figure out exactly how they should approach the problems. They’re very complicated.
Lorne: Very complicated. It’s hard.
Dale: Very emotional.
Lorne: Yeah. She’s been married for a long time.
Dale: Yeah.
Lorne: And it’s, you know, “Do I separate, don’t I separate?”
Dale: Yeah, exactly.
Lorne: There’s her financial security.
Dale: Lorne Fine, thanks very much for coming in and answering all these difficult questions.
Lorne: Thank you very, very much. Thank you for having me.
Dale: We’ll see you soon. All right.
Lorne: OK.
Dale: Lorne Fine. He’s the “Goldhawk Fights Back” family and divorce lawyer, and he’ll be back soon enough.
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