Separation & Divorce – Issues Relating to Daycare

Separation & Divorce – Issues Relating to Daycare

If you have young children, part of your financial obligation will involve some sort of childcare cost.  On divorce or separation, the parents will normally share this “special expense”, provided daycare is necessary due to work, education or health reasons.   If you are given receipts by the daycare provider, you can claim a deduction on your taxes for daycare expenses. The rule that the lowest income earner must claim the deduction while you are living in the same home no longer applies once you separate and live at different addresses.

Sharing Daycare Expenses in Divorce or Separation

When deciding how to share daycare expenses, the parents must first determine which proportion each of them will pay — will you share it 50/50 or in some other proportion?  Will you each pay your share directly to the caregiver or will one of you pay the caregiver or daycare centre and be reimbursed by the other parent?  In both cases, you have to take into account the tax deduction.  If one parent pays the whole amount, the other reimburses his or her share of the actual cost, once the deduction is taken into account.

Written by Simonetta A. Lanzi. Simonetta restricts her practice to family law, including matters regarding custody and access, child support, spousal support, property division and child protection, as well as uncontested divorces. Contact Simonetta A. Lanzi 

Related Links:

Family Law & Divorce

The Matrimonial Home & Divorce

Family Law & Divorce – What Happens at a Case Conference

Family Law & Divorce – What Happens at a Case Conference

What to expect when you are litigating – the case conference

The Case Conference in a divorce case is usually the first opportunity for parties to hear a Judge’s view of their case.  If both parties have lawyers, depending on the judge, a Case Conference may be held in the Judge’s chambers (office) without the parties present.  It is then up to the lawyers to convey to their respective clients what was said about the custody, access, equalization and other financial issues being discussed.  At times, a judge will then speak directly to the parties in the courtroom.

If the Case Conference is in the Courtroom, the Judge will sit at the front of the room, at a raised desk.  In front of him or her are several court staff – the deputy (who escorts the Judge into the courtroom through a special door); the registrar and the court reporter, who records everything that is being said.  The recording is not published.

The parties and, if they have one, their lawyers, sit facing the Judge and staff.  Usually, the lawyers will make submissions and the parties do not speak; at times, a Judge might ask you a question directly.  You should stand to respond unless told otherwise by the Judge.  Then the Judge will give his or her views of the case, and make recommendations.   Orders can be made on consent at the conference or, if proper notice has been given, the Judge may make an order even if the both sides don’t agree to it.  Child support may be ordered even without the consent of both parties depending on the circumstances.

Conferences require Briefs, but these documents (which follow a specific format) are not kept in the court file after the hearing. They are returned to the parties after the conference or shredded.  It is essential to prepare detailed and up-to-date Briefs that inform the Judge, and the other side, about the facts you are relying on and what position you are taking on custody, child support, equalization and any other issues involved in your divorce.

A family law case will go through several conferences, usually at least two or three, before being placed on a trial list, to give the parties ample opportunity to resolve the issues on consent.

Written by Simonetta A. Lanzi

Related Links:

Family Law & Divorce

The Matrimonial Home & Divorce

The Matrimonial Home & Divorce:  How Family Law in Ontario Affects Homeowners

The Matrimonial Home & Divorce: How Family Law in Ontario Affects Homeowners

It is a sad fact that more than 40% of marriages end in divorce.  In addition, some marriages end in a permanent separation but no divorce and are therefore not included in divorce statistics. Despite this high rate of marriage failure, prenuptial agreements remain rare.   Of course, it’s easy to understand.  Nothing puts a damper on wedding preparations faster than sitting down with lawyers to discuss what happens if your relationship doesn’t last “till death do us part”.

Do You Need a Prenup?

Fortunately, many people do not require a prenuptial agreement.  If you do not have children from a prior relationship, own a house, have significant assets, or earn a very large income, while a prenuptial agreement may be of assistance, your rights will probably not seriously be affected by not having one.  However, there are many cases where the absence of a prenuptial agreement has a severe effect on one or both spouses if their marriage ends.

The most significant example and the most common in my experience is where one party owns a property before marriage which subsequently becomes a matrimonial home.  According to s. 18 of the Family Law Act, a matrimonial home is defined as “every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence …”.  For the purposes of property division after a marriage has ended, this means the home or homes you and your spouse lived in on the date you separated.  You can have more than one matrimonial home on the date of separation, typically a cottage or other vacation property. You should ask a lawyer whether your vacation property qualifies as a matrimonial home as in some cases it will not.

The Family Law Act in Ontario

Before I explain why sole ownership of a property which becomes a matrimonial home is so significant, I need to explain how property division in Ontario (and most provinces) works on marriage breakdown.  In theory, it is a simple process:  with a few notable exceptions (see s. 4(2) of the Family Law Act), you are essentially dividing all assets that accumulated during the marriage.  You calculate your net assets on the date of marriage, and again on the date of separation, and arrive at what is referred to as your net family property.  Your spouse does the same calculation.  Whoever has the highest net family property makes a payment to the other spouse to equalize the amounts.  This payment is known as an equalization payment.

Unfortunately for many people, the notable exceptions I mentioned often produce unfair results.  There are many examples involving inheritances, gifts and damages awarded by a court.  I will address some of these examples in other blogs.  However, in my experience, it is an exception that relates to the value of a matrimonial home on the date of marriage that causes the most trouble.  This exception to the straightforward division of assets can be found in the definition of net family property in s. 4(1) of the Family Law Act.  The definition specifically removes the value of a matrimonial home from the calculation of assets owned on the date of marriage.  The significance of this cannot be overstated.  What it means is this:  if you own a home or vacation property on the date of marriage which becomes a matrimonial home and remains so until the date of separation, you must include the entire value of the property in the calculation of net family property, not just the increase in equity which accrued during the marriage.

Here’s an example to make it clear:  assume you had $300,000 in a bank account on the date of marriage and you just left it there until you separated.  Over the course of the marriage it earned $50,000 in interest.  If neither party had other assets or debts, you would pay your spouse one half of the accumulated interest on separation, or $25,000.  Now, assume you owned a home on the date of marriage with $300,000 equity and you still resided in that home with your spouse on the date of separation.  During the marriage the equity in the home increased to $350,000.  If neither party had other assets or debts, now you owe your spouse half of $350,000 or $175,000. In this example, you owe your spouse an additional $150,000 because your date of marriage asset was a matrimonial home rather than a bank account.

Divorce & Family Law: What Should a Homeowner Do?

It is not often that I can offer simple solutions to such a serious issue, but in this case I am please to be able to do so.  Perhaps that is why the Ontario government has ignored the recommendations of the Ontario Law Commission for the last 20 years to change this unfortunate law.  In any event, there are two ways to avoid the unfair result of this matrimonial home exception.

This first solution is to enter into a prenuptial agreement. If you are already married, you can enter into a marriage contract and still accomplish the same thing.  I cannot emphasize enough that this document should be drafted by an experienced family law lawyer.

But what if your spouse refuses to sign a prenuptial agreement or marriage contract? The solution is actually more straightforward and reliable from a legal perspective.  Sell your home or vacation property after you get married but before you separate.  Once the home is sold, it can never be a matrimonial home and you will be able to preserve your equity in the property as a date of marriage asset.  Your date of marriage equity will still be preserved even if you invest the sale proceeds in another property.  This solution does not depend on an agreement the validity of which may be challenged by your spouse after separation.

For those residing in the Pickering, Ajax, Whitby and Oshawa area, here are some helpful links to local resources:

Durham Family Court Clinic:
http://www.dfcc.org/links-and-resources.php

Family Law Information Centre, Oshawa:
http://yourlegalrights.on.ca/organization/family-law-information-centre-flic-oshawa

Michael Reilly is a family law lawyer and mediator practising in Pickering Village, Ajax, Ontario.

 

Family Law

Family Law

Reilly and Partners Family Law

If you are currently going through a family law dispute, you already know how difficult it can be to keep your emotions in check. You may be having a hard time making decisions or reaching acceptable resolution of matters with your former spouse or common law partner.

Family Lawyers Help You Work Towards Resolution

At Reilly & Partners our family law lawyers understand what you’re going through and want to reassure you that having such complex feelings when going through a separation or divorce is completely normal. After all, the decisions you make now will change your life for many years to come. For this reason, our goal is to offer you the advice of experienced and compassionate family law lawyers who will help you reach peaceful and practical resolution of your family law dispute. The lawyers of Reilly & Partners  can help you with family law matters such as:

  • Divorce
  • Separation
  • Cohabitation or Prenuptial Agreements
  • Child custody/access
  • Spousal support
  • Property distribution
  • Child Support

Reilly and Partners Ajax, Family Law Lawyers Are Ready to Help

Getting a family law lawyer from our firm involved in your situation doesn’t mean that you want to start or continue a conflict; it simply means that you’re ready to work toward a resolution so that you can move forward with your life. If you’re ready to put conflict behind you in favour of a fresh start, contact Reilly & Partners to see how our family law lawyers can help.

Divorce

There is usually a significant delay from the time two people decide to separate and the granting of a divorce judgment. In the interim, there are many issues which must be addressed including property division, child and spousal support, custody and access, and possession of the matrimonial home. Where one or more of these issues exist, it is preferable to negotiate at least a temporary and, if possible, a permanent solution. The terms of any agreement reached by the parties is often incorporated into a separation agreement.

Spousal and Child Support

 

Whether spousal support is appropriate and, if so, how much depends on a number of factors including the length of the marriage, the income and income potential of both spouses and the assets each will have after the matrimonial property has been divided.
Child support is governed by the Child Support Guidelines. The amount of support is determined by using the support payer’s income to the “table amount” of support. This is the basic monthly payment set out in the Guideline tables which is based on the payer’s income and the number of children for whom support is payable.

In addition to table support, there are provisions in the Guidelines for additional support payments or “add-ons”. These include medical expenses, post-secondary education expenses, extraordinary extracurricular activities and daycare expenses.

Custody and Access

One of the most difficult issues to consider when a marriage ends is who will have custody of the children. Although most separating spouses put the best interests of the child first and resolve this issue without acrimony, sadly this is not always the case. If there are no abuse issues, it may be helpful to consider mediation to help resolve custody and access disputes. Reilly & Partners does offer mediation services.

Separation Agreements

A separation agreement is a contract or agreement which is often entered into by separating spouses. It is not necessary to enter into such a contract in order to be considered legally separated, however, this type of agreement is very useful.

Pre-nuptial Agreements and Marriage Contracts

Issues which are dealt with in a pre-nuptial agreement typically include division of assets, spousal support, and the financial contribution of the spouses to the household. Pre-nuptial agreements are particularly useful in addressing perceived inequities in the Ontario Family Law Act, which governs property division on marriage breakdown in the absence of a pre-nuptial agreement or marriage contract. One such potential inequity is how the matrimonial home is treated (see Property Division). A marriage contract is essentially a pre-nuptial agreement that is entered into after marriage

Property Division

In the absence of a pre-nuptial agreement or marriage contract, division of marital property is governed by the Ontario Family Law Act. Section 5 of the Act provides that each spouse calculates the net value of assets less debts on the date of marriage and on the date of separation. Each spouse then calculates the amount by which his or her assets increased or decreased over the course of the marriage and any difference is equalized. In other words, the spouses share what has been accumulated during the marriage. This formula is subject to certain exceptions such as inheritances and gifts from third parties. The most important exception involves the matrimonial home the value of which may not be deducted as being owned on the date of marriage. It is this exception which provides the most incentive for having a pre-nuptial agreement or marriage contract.

Family Law Articles

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