Financial Aspects of Family Law

Child support is famously the “right of the child.” In practical terms, that has come to mean that payment of child support is virtually impossible to circumvent, nearly impossible to get arrears expunged and generally immune from what family law lawyers refer to as “a double dip” (dividing the value of an asset in half on a property division, and then seeking support on the income generated by that asset). In my experience if a parent walks into court in default of child support, that parent faces an uphill battle on any other issue, even if that issue is seemingly unrelated to child support. For example, courts for good reason hold that a parent who does not properly support their child, prefers their own pocketbook over the wellbeing of their child and should not be entrusted with decision-making responsibility over that child.

Child Support is predicated on income of the payor parent. Every level of income has a corresponding table amount of child support payable. Even though in theory the Court has discretion to order less than the table amount of child support for high income earners, this seldom occurs.

I have obtained many child support orders where the payor’s income is “imputed” beyond the amount the payor reports on their tax return. Conversely, I have also obtained an Order that Ontario lacked jurisdiction to make a child support Order. That was a circumstance where the Court made a correct but difficult decision, upheld by the Court of Appeal.

Spousal support is far more nuanced than child support. Unlike child support where exact amounts are paid depending on the level of income, spousal support has ranges determined by income differential, years of cohabitation and whether there are children. Where a spouse fits into the range is a function of a variety of factors, the biggest in my experience being a compensatory factor where the recipient can righteously say they made a sacrifice for the income-earner and is therefore on a higher moral standing than a spouse who made no such sacrifice. If a sacrifice was made, a helpful analogy is that the parties were engaged in a sort of joint venture, where the parent primarily responsible for raising the children freed up the time of the other spouse to maximize their income-earning potential. Compensatory circumstances are not limited to raising children; a spouse may agree to being uprooted so that the breadwinner can maximize their income-earning capacity; or a spouse may defer their own education or livelihood to help the primary breadwinner in his/her career.

Needs-based spousal support is predicated on maintaining the marital standard of living, if possible. The longer the relationship, the more the court will find that the parties have melded into one financial unit.

Unlike child support, spousal support can be waived. Unlike child support, double dip principles apply (with a few exceptions). Unlike child support, the need to pay spousal support can be transferred over to a successor spouse or successor partner. I have obtained an Order terminating spousal support in a long-term marriage, based on re-partnering, also upheld by the Court of Appeal.

Property equalization can be extremely complex. Courts have generally taken a very expansive interpretation of what constitutes “property.” The value of property accrued during the marriage or if unmarried, during cohabitation where a “joint family venture” is established, must be shared. If married, sharing of property is as of right, whereas if living in an unmarried common law relationship, sharing of property is based on the concept of “unjust enrichment.” There are a few specific exceptions to the sharing of assets accrued during marriage, spelled out in the Family Law Act for married spouses.

Your lawyer will be communicating with accountants and business valuators concerning various financial aspects of the breakdown of your relationship. Forensic exercises may need to be carried out, involving tracing exercises and a thorough understanding of financial statements and other accounting/bookkeeping documents. Sometimes, complex corporate organizational charts are the starting point.

I have represented clients who are the shareholders in such cases, as well as the spouses on the outside looking in. It is crucial that your lawyer has the highest understanding of the financial aspects of family law. In this regard, I have years of experience untangling corporate webs, a natural inclination for commercial litigation, and a thorough understanding of the law on matters pertaining to property and income.