Source: http://familyllb.com/tag/money/
Timestamp: 2019-04-26 07:39:53+00:00

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Father’s Income Cut By Half – Can Support Arrears of More Than $70,000 Be Wiped Out?
Under the terms of a settlement agreement that had been confirmed in a court order, the father had been dutifully paying about $1450 a month in child support, and $450 in monthly spousal support, based on his income at the time of about $100,000 per year.
In 2015, [the father] lost his job. He was not able to find similar work. His current income at his new employment is substantially less. He has also taken on the responsibility of a new family. He has two step children from the new marriage. Since 2015, given the change in his employment, he has been having problems making the support payments.
The court heard that the father’s current income was considerably reduced from his former six-figure mark: he was now earning around $45,000 per year.
In light of those changed financial circumstances, the father asked the court to eliminate his outstanding arrears entirely. In response, the mother claimed he actually owed another $40,000 more, over and above the arrears, to cover his unpaid share of one of their children’s university expenses.
The court confirmed that under the provincial Family Law legislation, it had the power to retroactively discharge or rescind child support arrears – but only if there has been a “change in circumstances” as that term is defined in the Child Support Guidelines. That threshold is met if the amount of child support, calculated using the current circumstances and the Guidelines, would result in a different mathematical figure than the one arrived at initially.
The accumulation of arrears without evidence of a past inability to pay is not a change in circumstances. As well, the present inability to pay does not by itself justify a change order. Such an order should only be granted if the payor can also prove a future inability to pay.
His arrears accumulated due to a change in circumstances that affected his ability to make the child support payments when they came due.
The father’s conduct, including any voluntary payments towards the arrears.
The court must also consider both the hardship endured by the father if he is ordered to pay the arrears, as well as the hardship to the mother if he is allowed not to.
In all cases, the paramount governing principles are firstly that the best interests of the couple’s children must be taken account, and secondly that the court should not provide either parent with incentive not to meet his or her child support obligations.
Here, the father was requesting a retroactive change to his support obligations based on his current income level. That being the case, the court would not typically agree to rescind or reduce his arrears unless he could establish, on the balance of probabilities, that he cannot and will not ever be able to pay them. The father failed to fully satisfy the court on that fundamental point.
In the end, the court decided not to vary the $24,000 in outstanding child support, since the payments were properly owed by the father throughout, in light of his duty to help with their child’s educational expenses. However, the court did agree to reduce some of the spousal support arrears, but only for only that period that the father was earning less than the mother. This still left him with $32,800 in outstanding arrears for spousal support and a total of almost $58,000 in arrears all-told.
MacKenzie Bezos announced earlier today in a tweet that she and, now ex-husband, Jeff Bezos, have settled their financial affairs in a private divorce agreement. Though full details of the Agreement are not publicly available, MacKenzie declared she was “happy” to sign over 75% of the couple’s jointly owned stock in Amazon as well as voting control of her shares and her interests in The Washington Post and the Blue Origin aerospace company.
Following the news of the Bezos family settlement, Amazon’s stock price reportedly dropped by a mere 0.4%. The Bezos’ settlement out of court played a significant role in stabilizing the effect their separation would have on Amazon’s viability, and stock price. Consider the contrary, for a moment—had the Bezos’ litigated their family law dispute, personal financial details would have been made public record, and the very fate of Amazon may have been at the discretion of a family court judge—which could have resulted in an outcome felt around the world.
The success of the Bezos family settlement illustrates key benefits of resolving legal issues out of court: privacy, creativity and a controlled impact on the family business. These same benefits can be realized by family business owners who choose the collaborative process. Collaborative clients are empowered to privately resolve legal issues using creative solutions like share transfers, family trusts and delayed equalization, to name a few, to ensure an orderly transition, preserving the family business, and family legacy for generations.
We have published several other posts on the very topic of how the collaborative process can help family run businesses survive and thrive after divorce. To learn more, click here.
At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com.
One of our most popular articles 10 Things You Should Know About Child Support was published nearly ten years ago in 2010. We challenged ourselves to provide deeper information for each topic. Family law can be a very tricky terrain to navigate. Understanding one’s responsibilities with respect to child support raises a lot of questions for parents and guardians, which we hope to outline and answer here.
All dependent children have a legal right to be financially supported by their parents. When parents live together with their children, they support the children together. Parents who do not live together often have an arrangement in which a child lives most of the time with one parent. That parent is said to have custody of the child.
This arrangement can be written in a separation agreement or court order (sometimes called legal custody), or may occur without a written agreement or court order (sometimes called “de facto” custody). Either way, the parent with custody has the main responsibility for the day-to-day care of the child and has most of the ordinary expenses of raising the child. The other parent should help with those expenses by paying money to the parent with custody. This is called child support.
Parent or guardian can be the birth mother or father, an adoptive parent, or step-parent, who has been married to someone with children, or who has lived as a couple with someone with children, and who has shown an intention to treat those children as members of his or her own family.
• Ontario Custody and Access: Who is Entitled to the Child?
• Ontario Child Custody: Who is Considered a Parent?
Child Support is the legal responsibility of parents or guardians to provide financial support for all dependent children. When there is an arrangement in which a child lives primarily with one of the parents or guardians they are assumed to have “custody” of that child and bear the day-to-day expenses of raising them; however, they may be entitled to receive child support from the other parent. This entitlement to child support may continue even if the custodial parent remarries or starts to live with someone else.
The amount of child support is usually set according to the Child Support Guidelines. More than one parent can have a legal duty to pay child support for the same child. For example, if a parent with custody of a child separates from their marriage or common-law spouse who is not the child’s birth parent, both the child’s other birth parent and the step-parent may have a legal duty to pay child support.
• Who Pays Child Support in Ontario?
• Can an Ontario Support Agreement or Order be changed?
• Can a Parent Replace Child Support…with Gifts?
Applying for child support is usually done right after separation or when applying for a divorce but can be applied for at any time thereafter. It is usually best to deal with these matters as early as possible and when sorting out the custody of the children. In the beginning, parents and guardians may feel they don’t want or need the support but as time goes on and the expense of raising children increases the need may arise at which time they can apply, even after divorce or settlement of matters arising from the separation have been dealt with. Under some circumstances the court has awarded custody and support while the parents or guardians are living separately under one roof but the court usually doesn’t make an order until one of the parents or guardians have physically moved out.
If the social and emotional relationship between the step-parent and child have disbanded for a lengthy period of time, it is less likely that the court would order the step-parent to pay child support.
• Video: When Can a Parent Apply for Child Support?
• Video: When do the Child Support Guidelines Apply?
In a situation where the child is 18 years of age or older and is living away from home because they are attending school, child support may have to be paid if the child’s primary residence is with the parent with custody. This circumstance usually requires child support to be paid until the child is 22 or receives a post-secondary degree or diploma.
In some of these situations, a judge can order the child support to continue past this point. If the judge decides child support must be paid past the age of 18, they will take into consideration how much the child has in earnings or income before determining the amount of child support to be paid.
• Does the Age of the Child Affect Child Support in Ontario?
• What Happens if Kids Skip School?
• How Long Does Child Support Continue in Ontario?
What is a Child Support Agreement?
In a situation where the parents can work together to form a Support Agreement, it is encouraged that they look at the Child Support Guidelines to find out the amount a judge would likely order. The paying parent will have to give complete and true information about their income. It is suggested that one parent should have a lawyer put the agreement in writing and that the other parent get a different lawyer to review it, before signing it. This way, both parents will know the agreement says what they intended it to say, while also protecting their rights and their children’s rights.
If the parents need help working out a Support Agreement then they can see a mediator who will help them come to an agreement they both can accept. The mediator is an unbiased party that does not offer legal advice. In this situation it is still recommended that the agreement is reviewed by both parent’s independent lawyers before signing, and filing with the court.
If the parents cannot agree on a Support Agreement then both parents should hire their own lawyer. The lawyers can then attempt to negotiate support terms that both parents can agree upon. If no agreement can be reached then they will go to court and ask a judge to determine support. The judge will then make a court order that states how much child support is required to be paid.
• Video: Ontario Child Support: How do you arrange for Support to be paid?
• Video: How are Child Payments Taxed?
Even if child support is not paid, a parent should not keep the child from seeing their other parent. It is assumed that it is generally good for a child to have a relationship with both parents. Keeping the child from seeing their other parent is considered punishing the child and the law will not punish the child due to their parent failing to pay child support.
Parents who do not have custody are usually given “access” to the children so that they can spend time together and maintain their relationship. The only way access can be refused or limited, is if the parent’s behaviour is likely to cause harm to the child, or harm the child in anyway. The courts will not refuse access because the parent fails to pay child support, and the parent with custody should not refuse access for this reason either. There are ways to obtain child support from a non-paying parent without refusing access.
• Can parents be kept from seeing their children if they do not pay their child support?
Enforcement in Ontario is done through a provincial government office called the Family Responsibility Office (FRO). The court automatically files all support orders made after July 1, 1987 with the FRO.
The parent who is to pay support is told to make all support payments to the FRO. When the FRO receives a payment, it sends a cheque to the parent with custody, or deposits the money directly into that parent’s bank account. It only does this after it has received the money from the paying parent.
If a payment is missed, the FRO takes action to enforce the order or agreement. To do this, the FRO needs as much up-to-date information about the paying parent as possible. The information about the paying parent goes on a Support Deduction Information Form which is available at the court. This form is given to the FRO along with the support order or agreement. It is important to update this form whenever the information changes.
How Can FRO Collect Child Support?
Once the order or agreement is filed with the FRO, then it is the FRO, not the other parent, that is responsible for any actions taken to enforce it.
Sometimes parents receiving support withdraw from the FRO because it is easier to receive payments directly from the other parent. But if problems arise later, and they want to re-file with the FRO, they might have to pay a fee to do this.
Parents who have an obligation to pay support should also know that the FRO cannot change the amount that the order or agreement says they have to pay. If they think that a change in their financial situation justifies a reduction in the amount of support they should pay, they must get a new agreement or go to court to get the support order changed.
FRO can be contacted by calling 1-800-267-7263 or you can also visit their website.
• Could Trucker Dad Avoid Child Support Due to Dizziness?
Russell Alexander Collaborative Family Lawyers has been providing answers and solutions to child support questions for over twenty years. If you need assistance determining whether you should be receiving child support for your child or collecting your support from the other parent, or if you believe that you should no longer be paying child support, we are here to help.
Can You Get Child Support from Your Ex After 50 Years in Ontario?
Multiple reports of a 74-year-old California mother getting $150,000 in child support owed to her from 50 years ago are hitting the headlines.
“Toni Anderson married Don Lenhert in 1966, but the couple split two years later.
During the divorce proceeding in mid-1970, the judge ordered Lenhert to pay child support for their 3-year-old daughter Lane, consisting of monthly payments of $210 for the first 2½ years, and then dropping down to $160 per month until Lane turned 18.
The order commenced January 1, 1971.
Those monthly payments comprise a principal of about $30,000, Anderson said, and with a 10% interest rate, he owes her $150,000.
“The first check bounced and then he went off to Canada with his girlfriend and had two more kids. He completely disappeared,” Anderson said.
Last year, Anderson realized there’s no statute of limitations for child support payments in California.
She Googled her ex-husband’s name and, she said, found photos of him living what appeared to be a financially sound life in Oregon, with a big house and a boat.
Does this sound fair to you?
Some would argue that the mother should have taken steps earlier to enforce support order and it is too prejudicial to require the father to pay now after 50 years. The child is an adult now so the $150,000 amounts to a windfall for the mother.
Others could properly point out that an Order is an Order, not a suggestion and the father should have complied 50 years ago, and any prejudice now is the result of his own misconduct.
Could this happen in Ontario?
As we have written previously the leading case in Canada for child support and retractive support awards is the Supreme Court of Canada’s decision in D.B.S.
If the claim for child support is made for the first time when the “child” is an independent adult, then the short answer is no. Child support is for children of the marriage, not adults who used to have that status.
If the basis of the retroactive claim is valid separation agreement or court order, then the answer would likely be yes. But each case is unique, and the court sets out several factors to consider in determining retroactive awards including, proper and timely financial disclosure, delay in seeking enforcement by the recipient and blameworthy conduct of the support payor.
At Russell Alexander Collaborative Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at RussellAlexander.com.
Did Landlord Have Duty to Warn Woman of Fraudster Boyfriend?
The [female] plaintiff … was the unfortunate victim of a [male] fraudster. She met [the man] in February 2012, and married him in March 2013. During the course of their relationship, [the man] persuaded [the woman] to sell her house, move in with him, and give him over two hundred thousand dollars. In the summer of 2013, she became aware that [the man] was not who he purported to be, and that she had lost the money she gave him.
When they had met online, the man told the woman he was a 56-year old wealthy Swiss-Canadian businessman, and heir to a fortune made from the Ovaltine beverage. In fact, he was 69 years old, born in Egypt, and had been convicted of fraud on a number of past occasions. When the woman finally confronted him about her money, he physically assaulted her, and was arrested. He was convicted of assault and fraud, and sentenced to 60 months in jail.
Their rental living arrangements while married became the focus of the woman’s subsequent legal claim against the landlord, Minto.
At the man’s urging, the woman had sold her house, quit her job, and moved in to the Penthouse of the Minto-owned building in which the man had previously rented a 9th floor unit. That move came after the man single-handedly negotiated with Minto about the Penthouse rent and terms. What the woman didn’t know, was that Minto had performed a credit check on the man, and finding there was “insufficient” credit information, had asked him to provide another name. Without her knowledge, the man offered up the woman’s name and a credit check was done without her consent. Based on her strong credit rating, Minto agreed to lease the Penthouse suite.
What the woman also wasn’t clear on at the time, was that she was listed as the tenant on the one-year lease calling for $10,225 in monthly rent. She said she signed after being rushed into it by the man, and thought she was signing merely as an occupant. In fact, the reverse was true.
She therefore sued the landlord Minto for damages, claiming it had a responsibility to take steps to: 1) protect her from the man’s fraud; and 2) alert her to the fact that she was actually the tenant on the hook for the hefty rent. She argued that, based on Minto’s interactions with the man, and given his long history of fraudulent activities for which he had been previously convicted and imprisoned, Minto had a duty to protect her from the man’s fraud.
The court rejected the woman’s claim. Even after seeing the man’s sketchy credit report, Minto did not have a duty to alert her about it in the time leading up to signing the lease. Although Minto did have a duty of good faith and honesty in performing its end of the lease – by providing a habitable rental unit in exchange for rent – it also had no duty toward her in the time leading up to signing it. Nor did it have any obligation to make it clear she was signing as the tenant, not the occupant.
There is no basis for a potential tenant entering into a lease to expect the landlord to protect him or her from the potential fraud of other people who will be occupants of the dwelling. The reality is that it would be exceptionally intrusive for landlords to have an obligation to inquire into the legitimacy and wisdom of the decision of two people to live together. This type of intervention bears no relation to the nature of the contractual relationship between the parties, and cannot give rise to an expectation that landlords would have such a duty.
The court added that even if landlords like Minto had such a duty, in this case any financial harm suffered by the woman was too remote. The court granted Minto’s motion for summary judgment, obviating the need to have the matter go forward to trial.
Income tax time will be upon us soon enough. If you are receiving spousal support from your former spouse, you may wonder how those support payments should be treated when it comes time to file your income tax return with the Canada Revenue Agency.
The answer is straightforward: If you are receiving spousal support from your former spouse or common-law partner, under a court order or written agreement that specifies the amount, frequency and duration of the payments, then those amounts are fully taxable in your hands. In other words, all those amounts must be reported as “income” on your tax return, and will be taxed accordingly. (This is unlike the situation with child support, which from the recipient’s vantage point is generally considered non-taxable).
Normally, that obligation to declare your spousal support as income on your tax return triggers a corresponding entitlement by your former spouse or partner to claim an equivalent deduction on his or her tax return for those same payments, with some exceptions.
So the short answer, is that spousal support is considered “income.” But what if the payments you receive now cover support payments that your former spouse should have made in the past?
A pair of recent decisions tackled a narrow – but important – issue relating to how: 1) retroactive support, and 2) support arrears, are to be handled for personal income tax purposes.
In a case from last year called Gonsalves v. Scrymgeour, the court reviewed the law on the tax treatment of retroactive spousal support awards (being those where the support paying spouse is newly-ordered to pay an amount that covers a past period of time during which the other spouse was eligible to receive it). The court confirmed that an award of retroactive spousal support should be reduced, to take into account the benefit of the income tax deduction that the paying spouse would have been able to claim, using the mid-point of the spouse’s respective marginal tax rates.
The more recent decision in Negin v. Fryers addresses support arrears (which are unlike retroactive support because they consist of unpaid amounts that were due under an order made previously). There, the separated parents had agreed in 2004 that the father would pay child support to the mother in line with Guidelines amounts, together with a set amount of spousal support. Apparently for some of the years since then, the father overpaid child support by over $52,000, and underpaid spousal support by more than $155,000. After offsetting these amounts, the mother claimed the father owed just under $103,000 in arrears.
The father claimed – unsuccessfully – that the lump-sum gross amount he now owed the mother in arrears should be “netted down” to account for the different tax treatment of lump sum spousal support, as compared to an order for periodic support. The wife pointed out – and the court agreed – that it was the policy of the Canada Revenue Agency to allow non-retroactive lump-sum spousal support payments to be deducted by father in the role of the support payor. The court directed the parents to calculate the amount of child and spousal support owed or overpaid accordingly (as the case may be), in keeping with its specific directions and ruling.
Nobody loves tax time (except perhaps the Income Tax Preparers and Accountants!) If you have questions about the spousal support you receive, feel free to give our office a call.
Can You Get Damages for “Emotional Distress” in Family Law?
In Ontario at least, the answer to this question is “yes”, according to the 2009 court decision in McLean v. Danicic, in which a wife was awarded significant damages after her husband engaged in what the court called “a relentless campaign of harassment” against her after they separated. This included him sending her numerous harassing letters and intimidating photographs, and sending her a written threat that he would “personally put a bullet in her head”. His conduct had caused the wife to suffer considerable distress, acute anxiety, and fearfulness which required her to seek medical attention and take medication regularly.
Accordingly, as part of the separation and divorce process the wife asked the court to award her damages for pain and suffering or for harassment, claiming that the Ontario Family Law Act (the “FLA”) allowed for such an award in the right circumstances.
2) where there is “assaultive behaviour” after a relationship breakdown.
The court further observed that in the second category of cases there is usually a criminal conviction for some sort of physical assault (and by definition a clear factual finding by a judge that the assault occurred).
3) resulting in a visible and provable illness.
Applying this test the wife was awarded $15,000 in damages, as a means of expressing “society’s outrage” at the husband’s conduct, and to compensate her for the losses she suffered. (The husband later appealed on an unrelated point, but was unsuccessful).
Despite the outcome in McLean v. Danicic, emotional distress damages will be awarded in every case, however. Two subsequent Ontario decisions from 2010 illustrate that the facts and circumstances will remain an important consideration in determining whether such damages are appropriate in any given situation.
In Druhan v. Druhan the court – after initially expressing doubt about its jurisdiction to award damages for mental distress at all – found no reason to award them in the case before it. According to that judgment, the mere fact that one of the parties to a family proceeding brings a motion, launches an appeal, responds to a motion with a cross-motion, or simply aggravates or distresses the other party, will not amount to “flagrant” or “outrageous” conduct under the relevant test.
Similarly in A.A. v. G.G., the court conceded that the mother’s conduct no doubt had a severe emotional impact on the father in the circumstances. However, it was unable to conclude that her conduct had resulted in the father suffering the required “provable illness”, since there was no medical evidence; indeed the court doubted whether the father had any illness at all.
Clearly, damages for emotional distress and mental suffering remain a distinct possibility in Ontario family law. But given the inherently volatile and distressing context of almost every family law proceeding, it will be interesting to see where the court will draw the line on culpable behaviour by separating and divorcing spouses.

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