These proposals let family law lawyers discuss and vote on what changes they think should be made to the law or court procedures. The results can be viewed and shared with legislators and the Courts. The proposals put forth are written by member lawyers, and do not necessarily reflect the views of this website or its administrators. You can view more proposals or make a proposal yourself.
Proposal: Always deduct estimated taxes and sale costs when dividing property and when accompanied by an accountant's estimate of taxes
Property - Aug 15th
|Ken Proudman of BARR LLP (Alberta)||1 Comment|
Subject to section 8 factors and exemptions, isn't the whole goal to leave each spouse with equal resources? We know that to pull money out of a house, you have to pay commission (likely 7% on the first $100,000 and 3% thereafter) as well as at least $1000 in legal and land titles fees. We know that if you elect to sell without a realtor, purchasers will generally be looking for a deal on the sale price. Each dollar in a bank account is simply worth more than each dollar in equity in a home. It's the same with taxable assets. Yet we often don't deduct taxes and sale costs unless there's an impending sale (except for taxes on RRSPs, which I don't understand the differential treatment other than that they're somewhat easier to calculate).
Some have argued that the sale costs and taxes may never be materialized during their lifetime, but isn't that the same with taxes on RRSPs? Doesn't it mean that they're just leaving their beneficiaries less when compared to other assets? Most assets probably will be withdrawn during someone's lifetime anyways, whether it's downsizing to a retirement home, selling a business, or using funds on retirement. Shouldn't the law be based on probably scenarios? At the end of the day, these assets are just worth less, and fairness requires that subject to s8 and exemptions, each spouse should have equal actual resources.
67% in favour out of 9 votes
Proposal: Property should be presumptively valued at the date of separation
Property - Aug 13th
|Ken Proudman of BARR LLP (Alberta)||3 Comments|
This was the Alberta Law Reform Institute's (ALRI) recommendation in their Final Report 107. See https://www.alri.ualberta.ca/portfolio-items/matrimonial-property-act-valuation-date/
This change would remove issues created by overlapping relationships, especially now that a spouse who's no longer cohabiting with their spouse may also have a claim against them by a new partner from the commencement of their relationship.
This would also reduce legal fees and lead to quicker resolutions, because we wouldn't have to constantly recalculate and repeatedly exchange disclosure, and wouldn't have to argue about issues like property acquired after the separation or whether a spouse should be entitled to a credit for debts paid down after the separation.
87% in favour out of 15 votes
Proposal: Section 36 of the FPA should be amended to oust the halving of exemptions in Jackson and Harrower
Property - Aug 13th
|Ken Proudman of BARR LLP (Alberta)||0 Comments|
Jackson v Jackson, 1989 ABCA 197 and Harrower v Harrower, 1989 CanLII 221 (AB CA) interpreted section 36 of the Family Property Act to mean that when property is placed into a jointly-owned exemption, any exemption should be halved.
When a spouse uses their savings for the down payment on a home, they're intending to facilitate financing or reduce CMHC fees, they're not intending to lose a part of their life savings upon separation. They shouldn't be punished for doing something that helped both spouses during the relationship. Similarly, when a spouse places another spouse on the title to their home, they're likely doing so for survivorship should they pass away, or so that the other spouse can share in the growth while the mortgage is paid down during the relationship.
If a spouse really is intending to gift part of their exempt property, then clear evidence of that intention should be required. So many people are caught off guard and surprised by this rule. It's also absurd in the context of very short relationships, what if a couple is only married for a few months before separating, but the mortgage-free house is placed into joint names during that period? Why should the spouse that didn't contribute receive an enormous windfall? I've seen this scenario. This rule is just an archaic windfall to the spouse with fewer assets. But what if the spouse with the exemption is on a limited income, for example due to a disability? If the exemption is a personal injury settlement or insurance for an injury, this sum might be an award for their entire future lost income, without any chance to replenish it.
70% in favour out of 10 votes