The end of a marriage or a long-term common-law relationship is almost always a painful emotional event for spouses and their children. Unfortunately, despite the anguish of the termination of the relationship, financial and parenting issues such as possession of the home, sale of the home, child and spousal support need to be addressed and resolved immediately.
There are three main issues which usually flow from marriage or common-law relationship breakdown: parenting of the children, equalization of net wealth accumulated during the relationship (“equalization of property”) and the allocation of income between the spouses to address child and spousal support issues.
Issues arising from relationship breakdown can only be resolved in two frameworks: settle with each other or go to court. Settlement can be achieved in a number of ways:
• The spouses can negotiate directly with each other and settle all issues in a written contract known as a separation agreement;
• They can negotiate with each other with the assistance of lawyers and professional advisors to achieve a separation agreement;
• They can proceed in a process known as collaborative family law. They agree that they will not go to court and, utilizing the services of collaboratively trained lawyers, attempt to resolve all issues in a negotiated framework which results in a separation agreement; or
• Engage in mediation/arbitration. This is a very effective and highly recommended process which avoids the costs and delay of court, yet results in a negotiated or adjudicated settlement of all issues. There is a detailed article on mediation/arbitration in the articles section of this website.
The first issue which should be addressed where there are school-aged children is their parenting. It must be determined in accordance with the children’s best interests. The test for determining the appropriate parenting arrangement for children includes the following:
• the love, affection and emotional ties between each child and each parent;
• the child’s views and preferences, if they can be reasonably ascertained;
• the length of time the child has lived in a stable home environment;
• the ability and willingness of each parent to provide the child with guidance, education; the necessaries of life and any special needs of the child;
• the permanence and stability of the family unit where each child will live
• the ability of each parent to properly parent the child; and
• the relationship by blood or through adoption between each child and each parent.
It is in every child’s best interest that both parents have a meaningful relationship with each child. Despite the emotions of ending the relationship, it is imperative that they set aside their own anger and emotions to communicate with each other and agree on an appropriate parenting plan. Co-parenting or shared parenting is the best solution. If parents won’t speak to each other in a civil and mature fashion to negotiate an appropriate parenting plan, the services of a parenting coach, mediator, social worker or other professional should be engaged to negotiate and adopt the appropriate plan for raising their children.
Equalization of Property
When a marriage ends, the spouse who has accumulated the greater net worth during the marriage owes one half of the difference in value to the other spouse in a process known as “equalization of property” under the Ontario Family Law Act.
The specifics of valuing individual assets and dividing their worth between spouses exceed the ambit of this article. Every significant asset must be valued both at the date of marriage and separation date. Income tax, capital gains, disposition costs and payment terms must be determined in order to resolve this complex issue. Legal and accounting advice is almost always necessary. Once the calculation of the equalization payment is determined, further complicated issues such as method and duration of payment remain.
Child and Spousal Support
Once the equalization payment has been calculated and determined, the issues of spousal and child support remain. Since 1997, the province of Ontario and Government of Canada have legislated that child support is calculated in accordance with the provincial or federal child support guidelines.
Spousal support is a more complex and difficult issue. Every spouse has an obligation to be self-supporting to the best of his or her ability after the relationship ends. The entitlement and duration of spousal support depends upon a number of factors including:
• the age of each spouse,
• the length of the relationship,
• the level of financial dependency arising as a result of one spouse undertaking the bulk of the child-rearing duties,
• the ability of a spouse to pay spousal support,
• historical earning patterns of each spouse,
• current or subsequent relationships with others and their financial consequences, and
• any other relevant factors particular to each fact situation.
All relevant facts need to be examined to determine whether a spouse is entitled and, if so, how much is be paid for how long. The federal government has proposed a system for determining entitlement and quantum of spousal support utilizing a computer generated model similar to the child support guidelines. This program is the Spousal Support Advisory Guidelines.
While not law, the Ontario Court of Appeal has ruled that the Spousal Support Advisory Guidelines must be reviewed in the factual matrix of each case and applied by trial judges unless there are good reasons not to do so.