The Truth About Financial Disclosure During Divorce or Separation
Debt disclosure during divorce or separation - Family Law Of Canada
Duty To Disclose Debt And Other Financial Information During Divorce Or Separation
The parties involved in a separation or divorce are under obligation to fully disclose all debts, assets, any joint accounts and information about Private Corporation.
This may not be an enjoyable task but a duty to disclose financial information is the fundamental requirement in family law.
In order to properly negotiate or litigate family law cases, the parties must have accurate financial information about each other. This will lead to fruitful discussions about any financial issues and ensure a fair outcome between the parties.
Financial Disclosure During Divorce or Separation Involving Children
The obligation to disclose all financial information is also predominantly important when there is a child involved. Parents’ separation should not neglect the child and the child should be able to enjoy the same benefits and lifestyle that he/she had while both parents were together.
Disclosure becomes essential to determine the party’s financial situation and their ability to pay child support.
Non-disclosure of financial information can increase the time and expense of litigation and deprive the entitled party of their share.
Deliberately Hiding Assets, Income Or Debt During Divorce Or Separation
The consequences can be severe in a situation where one spouse deliberately hides assets or income.
A recent case Skoronski v. Hage, 2017 ABPC 153, establishes that the obligation to disclose is the responsibility of parents and their counsel. In this case, the respondent father was a beneficiary to a family trust. He refused to disclose full information about the family trust and claimed that he had no control over the trust.
Further, the Respondent’s counsel advised that he had a chance to review the information and his client had no control over the trust. However, the father, in fact, was the beneficiary of the trust. Consequently, the court dismissed the father’s appeal and awarded costs against the father and his counsel for delaying the disclosure process.
Evidently, the court can draw an adverse inference where parties deliberately hindered the financial disclosure process.
Narang Law can provide you expert legal advice backed by many years of experience to help you navigate the difficult process of divorce or separation. Contact us today to move your case forward.
Satish offers professional legal advice and experience drawn from a multicultural background. He has spent his years in practice supporting clients through their family law, business law, real estate law, immigration law and wills and estates matters. He is able to find innovative solutions for his clients thanks to his rich, diverse background, which allows him to examine clients’ legal problems from a variety of different perspectives.
Matrimonial Property Division – Parental Gift or Loan
matrimonial property division - Calgary Divorce Lawyer - www.sknlaw.ca
Assume A Common Scenario
A young couple is about to marry. The parents of couple are happy and ready to support the couple to start their new life together. At time of marriage, the bride or groom receives money from the parents of one of them or both of them. In this type of situation, there is no documentation of transfer of funds because it is a gift from proud parents. After marriage, the couple starts living together as husband and wife. After few years of marriage, the husband and wife are having differences and they decide to proceed with divorce and matrimonial property division which is not pleasant for them.
At the time of matrimonial property division, the husband and wife may be in complete disagreement in regards parents’ monetary advances. The issue is whether the parents gave the money with the expectation of repayment and whether they intended the money for one or both parties in the marriage.
The memories are not clear and the husband and wife are not in good terms due to the split. Each of them is interested in using the monetary gift for self-serving purposes.
Parental Gift or Loan?
It is important to note that gift and loan are treated very differently under Matrimonial Property Act of Alberta.
In divorce proceedings or an ADR Process , it has to be determined whether the parent’s money was a loan or gift. Parental loans and gifts are subject to specific legislated rules.
In determining each spouse’s net matrimonial property portion, parental monetary gifts will be counted as debt if the monies were a loan to both spouses with promise to repay.
If the parental monetary gift is truly a gift to both spouses during the marriage, then the matrimonial assets list will include the gift. The gift will then be divided as part of the agreed course of asset division.
Classifying a parental gift is more complicated when it is not clear if the parent(s) gave the monies as loan or gift.
For divorce proceedings, the courts have set and listed various key factors to resolve cases like these. In determining whether a parent’s monetary advance is a loan or gift to an adult child, the courts consider the following factors:
- Whether there were any coexistent documents evidencing a loan
- Was a method for repayment specified?
- Whether there is security held for loan
- Whether there were advances to one adult child and not others, or advances in unequal amounts to various adult children
- Whether there was any demand for payment before separation of parties
- Whether there have been partial repayment
- Whether there was any expectation, or likelihood of repayment
Self-Serving Evidence In Matrimonial Property Division
The courts are cautious regarding self-serving evidence. This is when one spouse wants to use self-serving evidence in order to feed a matrimonial property claim. In the given scenario, the outcome depends on the circumstances and facts.
Help You Can Count On
It is important to discuss with a lawyer when you consider giving these types of gifts and loans to an adult child at the time of marriage, and during the course of marriage of an adult child because things can change in the future. Contact Satish Narang for helpful tips and advice to help you accurately navigate your matrimonial property division case.
Satish offers professional legal advice and experience drawn from a multicultural background. He has spent his years in practice supporting clients through their family law, business law, real estate law, immigration law and wills and estates matters. He is able to find innovative solutions for his clients thanks to his rich, diverse background, which allows him to examine clients’ legal problems from a variety of different perspectives.