Exemptions when Dividing Family Property: What You Need to Know

Many twists and turns are involved when dividing family property following a separation. There are special rules for dividing the family home, equitable claims that can be made, and many issues to consider. One such issue which can add complexity is exemption claims.

Exemptions can be claimed for items owned before marriage or before you became common-law spouses. Section 23 of The Family Property Act (Saskatchewan) provides for this. If you are eligible to claim an exemption, it will mean the value of that property is not subject to division (i.e. you will not have to share the value of that property with your spouse upon separation).

Here are six things you need to know about exemption claims:

  1. The definition of family property is broad under the Act. Examples of family property include items such as investments, bank accounts, land, personal property, etc. Generally, family property can be claimed as exempt if owned before the relationship.
  2. There are certain items that cannot be claimed as exempt. These include the family home and household goods which, generally, refers to property that is used for transportation (vehicles), household use (furniture, appliances, décor, etc.), and recreational use, but does not include antiques, artwork, jewelry, or anything used in a business or hobby.
  1. This means that if you owned a house prior to the relationship which your spouse moved into, in the vast majority of cases, you will be unable to claim an exemption for the house and it is presumptively equally divisible.
  2. Likewise, if you owned furniture before the relationship which you moved into your spouse’s house, you cannot claim it as exempt since it would be considered household goods.
  1. The value which can be claimed as exempt is limited to the fair market value of the property at the start of the relationship (the value at the date you are married or become common-law spouses). This means that, if the property grows in value over the course of the relationship, your spouse is, generally, entitled to share in that growth of value.  There are certain exceptions to this rule which will not be covered in this article.
  1. For example, if you owned an investment at the date of marriage and it grows by $50,000 over the course of the marriage, your spouse is entitled to share in that $50,000 growth in value.
  1. The exemption claim can be traced through the property.
  1. For example, if you were to cash in an investment worth $50,000 at the date of marriage and purchased artwork with it, the value of the artwork would be exempt up to the $50,000. Any increases in value over $50,000 over the course of the relationship would be shareable. 
  2. If you instead purchased a vehicle used for everyday driving, you would lose the exemption since that vehicle would be considered a household good.
  1. The fair market value of shares in a corporation as of the date of marriage/common-law is exempt. Any increase in value of the shares over the course of the relationship is, generally, shareable by your spouse.
  2. There are circumstances where an exemption claim will not be allowed if the Court finds that allowing the exemption would be unfair and inequitable. For example, if the property declines in value over the course of the relationship, it is generally unfair to allow the full amount of the exemption.

This article is intended to provide legal information only, not legal advice.  Dividing family property can be quite complicated. It is recommended that you seek the advice of a lawyer when considering the division of family property.

For further information, please contact:

Curtis P. Clavelle
Direct: 306-933-1341
Email: [email protected]

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What You Need to Know About New Assisted Reproduction Laws

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What You Need to Know About New Assisted Reproduction Laws

The Children’s Law Act, 2020 has recently come into place in Saskatchewan. This has updated the laws relating to decision-making and parenting time of children.  However, this article focuses on the changes made to assisted reproduction in Saskatchewan.

The new updates are a welcome change, revising our archaic former act. Under the old act I had clients attend clinics in British Columbia so that the surrogacy agreements could be governed by  British Columbia laws.  As an aside, there is also federal legislation and regulations dealing with assisted reproduction.

Here are nine things you need to know about the new Act:

  1. Assisted reproduction is broadly defined as a method of conceiving other than by sexual intercourse.
  2. The new Act is more inclusive, removing references to “mother” and “father” and instead referring to “parents” only. It further contemplates a variety of parental arrangements and agreements which can be made.
  3. In order to qualify as a surrogate, the person carrying the child must have the intention, at the time of conception, to relinquish parental rights to one or more other persons.
  1. This makes it vital that a surrogacy agreement is entered prior to conception which clearly specifies the surrogate’s intention to relinquish parental rights. All parties must also receive independent legal advice.
  2. A surrogate is not considered a birth parent where they have relinquished entitlement to parentage pursuant to the Act (more on this in part 7 below). If the surrogate has not relinquished entitlement, they will be presumed to be the parent of the child.
  1. A sperm donor is not recognized to be the parent of a child conceived through insemination. Therefore, if a sperm donor intends to be the parent of the child, a parentage agreement would be required. Oddly, the Act is silent in this regard respecting ova donors.
  2. If the birth parent of a child conceived through assisted reproduction, not including a surrogate, has a spouse at the time of conception, that spouse is automatically recognized to be a parent of the child, unless the spouse does not consent to be a parent of the child.
  3. Where there is an agreement specifying the parentage of a child, not including a surrogacy agreement (e. there is an ova or sperm donation agreement in place), upon the child’s birth, they are deemed to be the child of the intended parents under the agreement.
  4. However, for surrogates, not only must there be a surrogacy agreement in place prior to conception, the surrogate must also relinquish their entitlement to parentage of the child in the specified form after birth. This cannot take place earlier than three days after birth.  Presumably, this is to protect the surrogate and provide them a final chance to claim parental rights, although it certainly complicates things for the intended parents and could lead to messy situations.  The parents must then apply for an order declaring them to be the parents of the child, which must be made before the child is 90 days old.
  1. If the surrogate refuses to relinquish parental rights, the intended parents can apply to the court for an order declaring parentage.
  1. Surrogacy agreements are not enforceable at law, but can be used as evidence of a person’s intention to be the parent of the child, and the surrogate’s intention to not be a parent of the child.
  2. In determining bloodlines, if the person(s) who donated sperm, ova, or an embryo had no intention at the time of conception to be a parent of the child, they are not considered a blood relation to the child. For example, this would mean the child would be ineligible to inherit from the donor if they died without a Will in place.

This article is intended to provide legal information only, not legal advice.  Assisted reproduction matters can be quite complicated, and can lead to unintended results if not completed properly.  It is recommended you seek the advice of a lawyer when considering entering such an agreement and exploring your options.

For further information, please contact:

Curtis P. Clavelle
Direct: 306-933-1341
Email: [email protected]

How are lawyers involved when purchasing a home?

For many first time home buyers, purchasing a home can take a lot more time and effort than anticipated.  Finding a home is hard enough, but what needs to be completed afterward can be confusing and time-consuming.

This article will discuss the steps involved in completing a real-estate transaction after a deal has been reached, and things to bear in mind.

After your offer is accepted on a home, you need a lawyer to ensure all necessary paperwork is completed prior to your possession day.  You do not want to be a purchaser scrambling the day before possession to meet the requirements of your lender.

Concurrent or prior to making an offer on a home, you will usually deal with a mortgage broker or bank directly to obtain a mortgage. Once your financing is in place, the following is a list of the steps and documents involved leading up to possession day from a legal perspective:

  • Confirmation of financing and mortgage instructions from the lender must be provided to the lawyer. If you are dealing through a mortgage broker, the lawyer and mortgage broker will usually work together to ensure instructions are received. If not, you will need to follow up with the lender to have mortgage instructions sent to your lawyer.
  • Confirmation that adequate insurance is in place for the home on your possession day. This is always required by the lender, or else mortgage funds will not be advanced.
  • An estoppel certificate is required if the property is a condominium.
  • Once the lawyer receives the mortgage instructions, the mortgage and all required paperwork is prepared. Bear in mind that this takes time to do i.e. the lawyer will need the mortgage instructions at least several days prior to the possession date, ideally a week or more.
  • The lawyer then determines the “cash to mortgage”. This is the amount of funds over and above the mortgage you will have to pay for the home, legal fees, property taxes, land title fees to transfer title, Canada Mortgage and Housing insurance premiums (if applicable), etc.
  • A component of “cash to mortgage” is interest that will be paid to the seller. Interest generally must be paid on any purchase where a mortgage registered and the sale agreement provides for the same. On the possession date of your new home, your lawyer will have the “cash to mortgage” but he/she will not yet have the mortgage funds. The mortgage funds cannot be requisitioned until the title has registered in your name. As a result, most real estate agreements require the purchaser to pay the lender interest for the short time period when the seller does not have the sale proceeds in their entirety. Therefore, you pay interest on the amount they are owed during the first few days that you have possession. This does not result in double payment of interest, as interest does not accrue on your mortgage until it is registered.
  • You then meet with the lawyer to sign all requisite documents and provide the cash to mortgage to the lawyer. You will have to bring identification, a certified cheque/bank draft for the cash to mortgage, and banking information for property taxes and mortgage payments and proof of insurance.  The lawyer handles registering you for monthly tax installment payments to come directly from your account, interest free, if the municipality you are purchasing in offers such a program.  However, there are certain instances where property taxes must be paid to the mortgage company, who then pays the taxes on your behalf.
  • The lawyer then transmits the cash to mortgage to the seller’s lawyer. Once the cash to mortgage is received by the seller’s lawyer, you are generally good to go for possession day.
  • The lawyer then registers the transfer of title. Once title issues in your name, the lawyer requests the mortgage funds, which are then provided to the seller’s lawyer. This largely completes the transaction.

As you can see, it takes some time to ensure all the pieces are in place before you can take possession of your new home.  It is important to give yourself adequate time prior to possession day to ensure these things are complete, or else you risk possession day being pushed back or losing your deposit for failing to complete the transaction as agreed

For further information, please contact:

Curtis P. Clavelle
Direct: 306-933-1341
Email: [email protected]

COVID-19 and Parenting: How can I seek relief from the Court?

COVID-19 has presented many new challenges for parents to face.  You may find yourself in difficult situations.  What if the other parent is not physically distancing and continues to see relatives and friends and I feel their access should be limited to FaceTime only to protect the children?  What if I am not receiving the child or spousal support I should be?  Or what if I want to make an application for child or spousal support?  If you cannot reach an agreement with the other individual concerning these and other family law issues, you may want to seek relief from the Court.  However, the Court is only hearing matters on an emergency basis.

The purpose of this article is to provide a summary of the threshold you must meet in order for your matter to be heard by the Court right now.  If your matter does not reach this urgent threshold, then you may wish to consider mediation, arbitration, collaborative law, or another form of negotiation.

The Court’s Directive:

 

There are essentially four ways that your family law matter will be heard by the Court right now:

  1. The safety of either the child or a parent is at risk. This includes things like restraining orders, non-contact orders, and orders for exclusive possession of the family home;
  2. An essential medical decision must be made regarding a child or if a child has been wrongfully removed from the jurisdiction or wrongfully retained by one party (such as if one party withholds the child from the other; more on this below);
  3. There are dire circumstances of financial need, including where one party may squander or dispose of property such that an order to preserve property is required; or
  4. Any other circumstance which the Court considers urgent.

There are few reported decisions in Saskatchewan and, therefore, much of the case law is from Ontario. These cases are certainly still relevant in Saskatchewan as the Court looks to cases outside of the province, especially when dealing with novel matters such as COVID-19. The following are examples of cases which were, or were not, considered urgent enough to be heard by the courts.

The benchmark case is Ribeiro v Wright, 2020 ONSC 1829. In this case, the Ontario Superior Court explained that the presumption in most cases is that orders or agreements for parenting time should remain in place during COVID-19, unless there is evidence that one parent has been exposed to COVID-19 through their employment or otherwise, or there are heightened risk factors given their employment or personal behaviours. In these circumstances, a matter will be considered urgent and adjustments to the parenting schedule required.

The courts in Ontario have been clear that there needs to be a real concern for the safety of a child or parent in order for a matter to be heard on this ground. One example would be an imminent risk of harm to a child or one of the parties involved. Cases on this topic are addressed below in the “any other circumstance” category.

Essential Medical Decisions or Wrongful Removal/Retention/Relocation:

 

In L-AF v KVS, 2020 ONSC 1914, the father brought an application to prevent the mother from relocating with the child to a different city. His evidence was that the mother had listed her home for sale. The father was also concerned with strangers coming to view the house during the current quarantine as it violated physical distancing protocols.  The matter was viewed as urgent and set to be heard at a later date.

Placha v Bennett, 2020 ONCJ 164, was a case where the father took the child, who normally resided with the mother, on a holiday to Newfoundland and Labrador from Ontario. In the midst of the trip, the COVID-19 pandemic became an emergency and he refused to return the child to the mother in Ontario, saying it would be unsafe for the child. This was deemed an urgent matter and the child was ordered returned to the mother.

In an unreported decision from the Saskatchewan Court of Queen’s Bench from March 24, 2020, Justice Brown considered a case where a father was withholding the child from the mother under the guise that, since schools were closed down, the summer break had started such that they shared parenting equally. The mother applied to have the child returned to her care. This was determined to be an urgent circumstance and the child was ordered returned to the mother.

Amirzada v Alemy, 2020 ONSC 1979, was a case where the mother applied to move from Toronto to Vancouver until the COVID-19 pandemic was over. The father had assaulted the mother recently and there was a restraining order in place. The court deemed this matter urgent, and ultimately ordered that the mother was not allowed to move due to the risks associated with travelling cross country, the unknown length of time the pandemic will last, and the father’s restricted access to the child.

Dire Financial Circumstances:

 

In Roberts v Roberts, 2020 ONSC 2341, an anaesthesiologist applied to reduce his spousal support payments to his ex-wife. In 2018, he earned $634,747, but he later suffered a heart attack and had to stop working. He was currently earning $104,400 per year on disability.  Given the extent of the drop in income, the Court concluded these were dire financial circumstances and scheduled the application to proceed.

An application for child support which had previously been deemed urgent and subsequently scheduled to be heard on an emergency basis was considered in Lafond v Blouin, 2020 ONSC 2396. While the decision did not indicate why the matter had previously been deemed urgent, the case involved a mother whose sole sources of income were social assistance and tax credits of around $12,000 per year.  There were two children involved.

In Mohamed v Osman, 2020 ONCJ 172, a woman from the United States brought an application for child support prior to COVID-19 shutting the courts down.  The Court made a temporary order providing that the father pay child support and adjourned the application until after the courts return to normal operation.  Of relevance here is that the father’s income was unknown, and the Court imputed it to $25,000, noting that it would have normally imputed income of $40,000 if we were not in the midst of COVID-19.  In making the temporary support order, the Court noted that the mother was supporting three children on her own without help from the father which was unacceptable.

In Scion v White, 2020 ONSC 1915, the father applied for relief regarding access, finances, and property. However, the Court determined that only the access issue was urgent and refused to hear the issues relating to finances and property.

Regarding family property, in order for a property issue to be urgent, there must be an imminent risk of irreparable harm, including unnecessary financial loss, if the application is not heard immediately (JW v CH, 2020 BCPC 52).

Any other Urgent Circumstances:

 

These cases have been described as “exigent” or “critical” in the case law. The Court will ask itself whether any harm or prejudice would result to one party if this matter is not heard immediately. In the vast majority of cases, the answer will be no.  Most matters will be able to wait until the Court is back in regular session.  The cases previously discussed, and those discussed below, provide an indication of what is urgent in the eyes of the Court.

In Thomas v Wohleber, 2020 ONSC 1965, the Ontario Superior Court laid out four factors which must be met in order for a matter to be considered urgent:

1. The concern must be immediate and cannot wait to be dealt with later;

2. The concern must significantly affect the health or safety or economic well-being of the parties or their children;

3. The concern must be tangible. It must be a real, proven concern, not something that is speculative; and

a) For example, you cannot simply say that you do not think the other parent will follow physical distancing protocols. Rather, you must have clear and specific evidence that they are not doing so.

b) In NJB v SF, 2020 BCPC 53, the B.C. Provincial Court dealt with a matter where the father had restricted all access to the mother. The father did not think the mother would take COVID-19 seriously, based largely on her history of mental health issues which lent themselves to conspiracy theories.  The Court found the father’s concern was only speculative and not born out by the evidence presented.

4. The concern must be clearly articulated and proven in the evidence put before the Court.

The case law shows there is a high standard to be met here. In KB v KK, 2020 SKQB 86, a father applied to the Saskatchewan Court of Queen’s Bench to place the children in his primary care, rather than the mother’s. The father had concerns with the mother’s parenting and that she was abusing drugs.  The Court determined that this was not an urgent matter and it was adjourned, largely because there was no evidence that the children were in any way at risk.

The KB v KK decision referenced an unreported Saskatchewan Queen’s Bench decision of March 25, 2020, in which Justice Brown explained that most matters will feel urgent to the parties involved, however, those matters which are currently being heard are those with importance in the context of the physical distancing and isolation reality we are presently living in. If the matter can wait until after the current pandemic is over, it is not urgent.

In a recent Saskatchewan decision, TDL v SDS, 2020 SKQB 97, the father, prior to COVID-19, applied to vary a judgment from 2014 regarding parenting of the children. The matter was adjourned after the Court largely restricted its services to emergencies only. The father then applied again for the matter to be heard on an urgent basis, part of which was that the mother was not obtaining and administering the requisite hormone therapies for their transgender child.  Since the child had not yet started hormone therapies for transition, the Court did not consider this to be urgent to the child’s health or wellbeing.

In Davis v Eby, 2020 ONSC 2011, an application was made by the mother to restrict the father’s access to supervised only due to safety concerns.  The child had been present in the father’s home when the father’s cousin overdosed on drugs.  There were also concerns that the father continued to have drug issues as he refused to submit to a drug sample per a court order.  This matter was deemed urgent and heard by the Court.

In Scion v White, 2020 ONSC 1915, the Ontario Superior Court noted that issues relating to access with children can only “potentially” be urgent if there is a complete denial of access. So, even if you are upset with a lack of access, the Court may only see it as urgent if there is a complete denial of access.

  • In Tessier v Rick, 2020 ONSC 1886, the father applied to enforce a court order for his access. The mother had been denying all access to the father, but her evidence was that the father was not observing COVID-19 safety protocols.  The Court saw this as an urgent matter, largely due to the apparent risks to the child and the child’s young age (3.5 years-old).
  • Likewise, in Le v Norris, 2020 ONSC 1932, the mother was withholding all access to the father for several reasons, one being COVID-19. The Court determined this matter was urgent and ordered that the father’s access be restored per the court order in place.  The Court noted that people should use basic common sense to follow court orders and respect physical distancing protocols at the same time.

For more information, please contact:

 Curtis P. Clavelle

306.933.1341

Email: [email protected]

COVID-19: Why now is not the time to put your life on hold

It feels as though life is on hold these days.  People’s careers have been paused.  Kids are home from school.  Our social lives have become considerably more restricted.  We have all been forced to become homebodies, even if we (secretly) don’t mind it. 

However, now is not the time to put your life on hold.  You may have heard that the courts in Saskatchewan have largely been shut down and are only proceeding with emergency situations. As an update, the courts will begin hearing non-urgent applications again in the beginning of June by telephone.  Those of you who are contemplating a separation or divorce may think you are out of luck until the courts begin hearing new matters.  I’m here to tell you that this is not the case. 

There are several process options available to you to deal with your separation or divorce outside of court.  In fact, with the extra time many of us have these days, it makes sense to deal with these matters now so that you can have a fresh start after the COVID-19 quarantine ends. It will soon become mandatory to engage in one of the processes described below before you can seek relief from the courts, so why not get ahead of the curve? 

Collaborative Law:

Through the collaborative law process, parties enter into an agreement right from the start stating that they will not proceed through the court to settle their issues, which saves the heightened animosity and tension court proceedings bring.  It also ensures that the parties are focusing on resolving their issues in a frank and forthcoming fashion, which can ultimately result in time and cost savings and more practical solutions which work best for the parties.  If the parties are ultimately unable to resolve their issues through this process, they can still seek relief of the courts afterward.

You and the other party would work closely with collaboratively-trained and certified lawyers to resolve the legal issues in the case, including property division, custody/decision making, parenting plans, child and spousal support, and divorce.  These lawyers have special training in negotiation, interest identification and option creating, and domestic violence.

Depending on the case and the needs of the parties, other professionals may also be brought into the process.  One such professional is a collaboratively-certified financial advisor, who works to gather property and income information from both parties and provides analysis. They can also be retained by the parties to help them develop a financial plan to move forward with their lives.

The other professional which can be brought in is a collaboratively-certified mental health professional to help the parties deal with issues between them and work together toward settlement.  This professional can also help the parties learn how to best co-parent with each other moving forward and ensure that the children’s needs are identified and incorporated into a final settlement.

In cases where intimate partner violence or control issues are present, the mental health professional can be a key part in helping the parties move forward.  Some people prefer this route as it enables them to face their abuser while helping them appropriately deal with trauma.  This can be particularly helpful in cases where the parties must still co-parent with each other moving forward.

Should you be interested in taking a collaborative approach to your separation or divorce, Curtis Clavelle, the writer of this article, is a collaboratively-certified lawyer and would be happy to discuss the process more: [email protected] or 306-933-1341.

Mediation:

This process is for those who would like a neutral third party to help them come to an agreement.  You may choose to also engage a lawyer to help you through the process.  The mediator is a trained professional whose role it is to help the parties communicate with each other more effectively, recognize what their needs are, and help them reach solutions that meet these needs, without taking sides.

This process generally saves time and money as compared to going through the traditional court approach and results in decisions that work well for the parties, since they are ultimately the ones making the decision rather than having a judge make it for them.  Just like the collaborative approach, mediation can also help parties learn how to work with one another post-separation, which can be especially helpful when they must co-parent moving forward. 

If you are interested in using a mediator to resolve your family law matters, Darlene Wingerak of Robertson Stromberg LLP is a mediator experienced in family mediations and she would be happy to discuss the process more: [email protected] or 306-933-1392.

Arbitration:

 

In this process, a family arbitrator essentially plays the role of a judge.  The arbitrator hears from both sides and makes a binding decision in order to resolve your family law matters outside of court.  Family arbitrators are lawyers with at least 10 years of experience in family law and have taken training in arbitration, decision-making, and family violence. 

The arbitration process offers quicker decisions than a court process and generally saves the parties money.  This process is well-suited to those who want a third party to make a decision for them, without the delays and formalities associated with the court process.

This is different than the collaborative process and mediation since you are asking another person to make a decision for you, rather than working with the other party to come to a resolution.  However, sometimes arbitrators use a combination of methods in reaching their decision, including negotiation and/or mediation.  You and the other party agree ahead of time how you want the arbitration to proceed.  For example, you could agree that lawyers will not be present, or that you will only submit written materials to the arbitrator rather than giving oral testimony. 

If you are interested in using a family arbitrator to resolve your family law matters, Tiffany Paulsen, Q.C., of Robertson Stromberg LLP is a certified family arbitrator and she would be happy to discuss the process more: [email protected] or 306-933-1317.

For more information, please contact:

 

Curtis P. Clavelle

306.933.1341

Email: [email protected]

 

Darlene N. Wingerak

306.933.1392

Email: [email protected]

 

Tiffany M. Paulsen, Q.C.

306.933.1317

Email: [email protected]

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