What’s in a Name?
Plenty – so learn how to protect your family assets!
One area of family law which does cause considerable confusion and frustration to clients, and family law lawyers alike (including me), involves trying to determine what assets are family assets, and what liabilities are family debts.
Why is it so darn important? Because when married parties separate there is a presumption (albeit rebuttable- meaning it can be overturned in certain circumstances) that each party will share equally in the family assets.
What is often not so well understood (or received) is that the same presumption also applies to family debts. Also, do not assume that just because an asset or debt is only in one name that this means that it need not be shared.
A family asset is generally any asset (whether in one name or joint) which has been used, or enjoyed, for a family purpose. Sometime it can be easy, such as the family home, or joint bank account.
Also note some assets are deemed at law to be family assets. The most common are RRSP’s, employment pensions, and CPP benefits.
But what about an inheritance received by one spouse prior to the separation, or a business owned, and operated by, by one spouse? While any determination will depend on the unique facts of each case, the more readily that an asset has been used, during the marriage, to provide financial support, or security, to the family, the more likely it will be considered a family asset.
So what’s my advice if you and your spouse are separating, and you’ve accumulated family asset or liabilities, or you’re simply not sure whether or these qualify as family assets or family debts? Don’t assume anything until you’ve received some legal advice! Otherwise you could either be giving up, or giving away, a great deal of money, for no valid reason.
In addition, it’s also an excellent idea, for practical reasons, to keep all records and statements from the date of separation. Such records could include bank accounts, RRSP statements, and credit card, mortgage, and Line of Credit statements. This is the best way to ensure that there can be a fair, and accurate, division of both assets and debt.
And if the thought of collecting all these records sounds unappealing, just remember, without such documentation, neither the law nor any lawyer can do you any good!