Is life insurance required to secure a child and/or spousal support obligation?

A court may well require the payor of support to secure the payment by obtaining a life insurance policy to secure their support obligation. This way, in case the support-payor dies amidst his/her obligations, the children and/or spouse will be awarded the life insurance proceeds arising from the payor’s death in lieu of future support payments.

For instance, the Ontario Court of Appeal in Katz v. Katz ordered the father to purchase a life insurance policy for $500,000 and designate his children as beneficiaries and their mother as trustee of this policy. Furthermore, the judge also required the father to obtain the policy within 60 days of the release of reasons for judgment.

Just as the Court of Appeal held in Katz, the parties were made well aware that once the father’s child support obligations ceased to exist, the requirement to maintain the policy would cease.

Interestingly, in Katz, the father had a medical condition that prevented him from purchasing life insurance. Upon hearing the news, the mother of the children brought a motion for contempt based on the fact that the father was not complying with the court’s original order to obtain life insurance. The motions court ultimately ruled that there was nothing more the husband could do, and thereby it refused to make any further order with respect to the father purchasing life insurance.

To learn more about life insurance and child support as well as the services provided by Krol & Krol, call 905.707.3370 today.

Dependent Relief Claims in Ontario

The Succession Law Reform Act has recently been interpreted to possibly allow for the addition of non-parties to a dependant’s relief claim.

In the case of Brash v. Brash Estate, the Superior Court of Justice ruled that the applicant’s children were under an obligation to support the applicant (their mother), and thus should be added to their mother’s dependant relief claim.

The case saw a 90-year-old widow opt for an equalization payment against her late-husband’s estate, as she claimed to fall under the legal realm of a “dependant” under the Succession Law Reform Act (Part V – Section 57 of the Act defines the scope of the term “dependant”). She had been left with practically nothing under his will, and therefore sought compensation from the estate that was now in the hands of his children. Being that she had four children of her own that were within their means to support their widowed mother, his children sought to add them as parties to the proceeding.

In the interest of justice to the Act and especially to the estate of the late husband, Justice Cornell ruled that her children should be added as parties to the proceeding. Justice Cornell pointed to the Case of Baddeley v. Baddeley, and acknowledged that her children may wind up bearing the obligation to support their widowed mother.

To learn more about dependant relief claims as well as the services provided by Krol & Krol, call 905.707.3370 today.

The Distinction Between a Review and a Variation of Spousal Support

The difference between a court order directing a review of spousal support and an order to vary support is critical and imperative to understanding what courses of action a judge can take in either circumstance.

If a judge has ordered to review support at some specific point in the future, then upon review, the case is completely reopened and the judge may take whatever measures he sees fit in accordance with the objectives of the Divorce Act.

In cases where a court is presented with a variation order of support, the judge is restrained from completely reopening and reviewing the case. The only option left for the court is to vary spousal support based on a material change in circumstance.

This distinction between a review and variation of spousal support was demonstrated in the case of Marche v. Wagstaff. In this case, the Court of Appeal sent the matter back to the trial court because, in its view, the trial judge had failed to apply the proper course of action when dealing with a variation of spousal support. The Court of Appeal ruled that allowing the husband to discontinue spousal support payments on the basis that his wife did not make a reasonable effort to seek employment was reopening the case which is a measure only allowed when reviewing support. Since the matter dealt with a mere variation of support, the only aspect the judge was allowed to take into account was the material change in circumstance.

To learn more about spousal support as well as the services provided by Krol & Krol, call 905.707.3370 today.

“Double Dipping” in Spousal Support

As conveyed in the case of Boston v. Boston, there is no absolute prohibition against a spouse recovering double of his/her share in spousal support (commonly referred to as “double-dipping”).

However, the Court of Appeal in MacQuarrie v. MacQuarrie stressed the fact that courts will attempt to steer away from a ruling that awards a “double-dipping” of spousal support when it is fair to do so.

It is worth noting, that in MacQuarrie, Justice McQuaid pointed to the reality that some cases will call for a double recovery of spousal support in the interest of the principle of fairness.

Recent case law suggests that the principle against “double-dipping” surfaces when spousal support is awarded on a compensatory basis rather than one predicated upon necessity.

In Senek v. Senek, the Court ruled that, despite a material change in circumstance where the husband had recently retired, the wife was entitled to “double-dip” and receive spousal support from her husband’s pension simply on the basis of necessity. Therefore, when a Court is faced with the dilemma of awarding a double-recovery of spousal support, the Court will render a decision based on principles such as fairness and necessity.

To learn more about double dipping as well as the services provided by Krol & Krol, call 905.707.3370 to book a consultation today.

Estephan v. Estephan: British Columbia Court of Appeal on Setting Aside Separation Agreements

Estephan v. Estephan is a family law case that has recently been decided by the British Columbia Court of Appeal on the issue of specifically attacking Separation Agreements.

Facts

The parties started living together in 1986, married in 1996, and separated in 2005. The parties had two children. The wife was the primary caretaker for the children throughout the marriage and the husband was a successful lawyer. The wife has serious health issues that prevented her from working on an ongoing basis.

After a mediation, the parties purportedly settled all financial and parenting issues, including the wife providing a release of spousal support in return for a lump sum. The parties had obtained independent legal advice, there was financial disclosure prior to any mediation, the husband did not hide any assets, and the wife received an unequal division of family property.

The wife then moved to overturn the Agreement through the family law courts. She also asked the court for spousal support. At trial, the crux of the issue was whether the agreement was signed in “unimpeachable circumstances.”

Decision at Trial

The trial Judge found that the separation agreement was binding.

Decision on Appeal

The British Columbia Court of Appeal allowed the appeal and sent the matter back for a re-trial.

According to the British Columbia Court of Appeal, the trial Judge erred in not explicitly testing the provisions of the separation agreement as against the factors outlined in sections 15.2(4) and 15.2(6) of the Divorce Act. According to sections 15.2(4), in making an order for spousal support a court should consider the condition, means, needs, and other circumstances of each spouse including:

  1. The length of time the spouses cohabited;
  2. The functions performed by the spouses during cohabitation; and,
  3. Any order, agreement, or arrangement relating to support of either spouse.

Moreover, section 15.2(6) states that an order for spousal support ought to:

  1. Recognize economic advantages or disadvantages to the spouses arising from the marriage or the breakdown of the marriage;
  2. Apportion between the spouses financial consequences that arise from the care of any child of the marriage over and above any obligation for the support of any child;
  3. Relieve any economic hardship of the spouses arising from the marriage breakdown; and,
  4. Insofar as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

The Court further noted that the wife had a strong claim for compensatory spousal support and that such a claim needed to be analyzed in order to reach the conclusion that the agreement substantially complied with the Act. Since the record did not provide adequate details and facts for the Court of Appeal to make this assessment, the matter was sent back for a re-trial.

The decision by the British Columbia Court of Appeal is contentious as it requires trial judges to engage in a complex analysis. In this case, that analysis is complicated by the fact that the wife in this proceeding did not seem to provide the requisite information so as to allow the trial Judge to engage in this analysis.

To inquire about our services, spousal support and separation agreement, the team of family lawyers in the Greater Toronto Area can be reached at 905.707.3370.

 

How are post-separation income increases treated for support purposes?

At the outset, it is important to note that child support, pursuant to the Child Support Guidelines, is supposed to be recalculated on a yearly basis.

On the issue of child support payments, the child is entitled to benefit in the payor’s post-separation increases income in the form of increased child support payments. In situations where there is an existing order and/or agreement, one would bring an application to vary the existing order and/or agreement. If the application to vary the existing order is granted, then the amount will be adjusted in accordance to the new income of your former spouse.

The issue of a payor’s post-separation income increase and spousal support is less clear. Lawyers and judges alike continue to grapple with this issue.

While this question usually arises during a review, it can also arise during the time of the initial order.

The following are some general principles applicable to this issue:

  1. It would be incorrect to suggest that the Spousal Support Advisory Guidelines dictate that the parties’ incomes at the time of separation is the only relevant income in determining spousal support.
  2. It is also incorrect to suggest that the Spousal Support Advisory Guidelines dictate that the spouses’ post-separation incomes always ought to be used in determining spousal support.
  3. Some factors to be considered on this issue are the length of the marriage, the immediacy of the increase (one year vs. 10 years after separation), and whether spousal support is compensatory or non-compensatory (since non-compensatory spousal support would present a less compelling argument that the payor’s post-separation increase should be shared).

In situations where there is an existing order and/or agreement, and there has been a material change in circumstances, one would bring an application to vary. If the application to vary the existing order is granted, then the amount of spousal support will be adjusted in accordance to the new income of your former spouse.

For more information on what you are entitled to in the event that your spouse’s income increases, contact Krol and Krol at 905.707.3370.

Spousal Support: Where One Parent is the Caretaker of a Disabled Child

Jans v. Jans is a 2013 decision from the Alberta Provincial Court.

Issue

The issue of spousal support arose where a single parent was the sole caregiver to a disabled child.

Facts

The parties started living together in 1989, married in 1991, and then separated in 2010. The wife was a stay-at-home mother for most the marriage and the father was the breadwinner. The youngest child of the marriage had Down Syndrome and lived with the wife. It was clear from the facts of this case that the child would require a significant amount of care from the mother on a continuing basis. The wife worked part time with a yearly income of $25,850 and the husband earned $41,250 per year in seasonal work.

Decision

The wife earned a compensatory claim for spousal support.

Justice P.E. Kvill of the Alberta provincial Court notes that the Spousal Support Advisory Guidelines (commonly known as the SSAG) are not mandatory piece and are only advisory. He finds that the SSAG do not adequately address a situation where one parent is the sole caregiver for a disabled child and therefore, orders that the mother should receive a lump sum of spousal support (equalling slightly more than what would be ordered based on the SSAG).

Contact the experienced divorce lawyers at Krol & Krol at 905.707.3370 to learn more about spousal support and the services provided by the firm.

What are the Spousal Support Advisory Guidelines?

The federal Department of Justice introduced the Spousal Support Advisory Guidelines (SSAG) but the federal government has not legislated the SSAG. In this sense, the SSAG are not obligatory.

Nonetheless in Fisher v. Fisher, the Ontario Court of Appeal approved of the use of the SSAG and provided that the SSAG should be applied as follows:

  • The SSAG are applicable to cases of first instance. However, they are not automatically applicable on variations or reviews or where a previous agreement provides for support, although the court may consider the SSAG in these cases.
  • The SSAG do not necessarily apply to payor spouses who earn more than $350,000 per year.
  • The reasonableness of the SSAG calculation must be weighed in light of the particular facts of each case.

It is important to note that the SSAG do not determine as to whether a person is entitled to spousal support.

The SSAG provides three figures or quantums of support payable from the higher-earning spouse to the lower-earning spouse. Specifically, it provides a high, mid and low figure. As well, the SSAG outlines the duration of spousal support. In the context of a long-term marriage, the duration of spousal support may be indefinite.

To learn more about spousal support in the context of family law, call 905.707.3370 to arrange for a consultation today.

What happens if the payor of spousal support has an increase in income after the date of separation?

In order to calculate the quantum of spousal support payable, the incomes of the parties must be determined. The respective incomes of the parties is then used in order to calculate a range of spousal support applicable in a given case.

There are two issues that arise when a payor of spousal support has a post-separation increase in income. First, whether an income increase should be reflected in increased spousal support. In addition, if it ought to be included, how much of the increase should be included in determining the income of the payor for the purposes of spousal support (ex: all, some, or none of the increase ought to be taken into account in calculating spousal support). In making determinations on these issues, the following factors are taken into account:

  1. The length of the marriage;
  2. The roles adopted during the marriage;
  3. The time that has elapsed between the date of separation and the post-separation increase in income; and,
  4. The reason for the income increase. For instance, has the payor assumed a new job or did he or she receive a promotion within the same job?

According to the Spousal Support Advisory Guidelines, the upper limit or outer boundaries upon any increased spousal support in these cases should be the numbers generated by the formulas.

Should you wish to learn more about the laws surrounding spousal support and a payor’s post-separation income increase in family law, telephone Krol & Krol for a consultation at 905.707.3370.

Is spousal misconduct related to spousal support?

According to subsection 15.2(5) of the Divorce Act, spousal misconduct in a marriage is not a proper consideration in determining an order for spousal support.

According to section 33(10) of the Family Law Act, the obligation to provide support for a spouse exists without regard to the conduct of the spouses. Nonetheless according to this section, a court may consider spousal misconduct in relation to determining the amount of spousal support order only in the rare case where the misconduct is so unconscionable as to constitute an obvious and gross repudiation of the relationship.