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Posts tagged ‘alimony’

Is $122,858 USD a Month Enough to Live On?

 

Is $122,858 USD a Month Enough to Live On?

Recently it was reported that Tracey Hejailan-Amon was granted $122,858 USD as temporary monthly support. This is in addition to a lump-sum payment of $1,262,121. However, Tracey Hejailan-Amon says it “isn’t enough”.

Her husband Maurice Alain is apparently worth $1.4 billion.

The support order was made by a Monaco Court, but the wife would like to have the case heard in New York. Her lawyer stated that the wife:

“maintains that she was never domiciled in Monaco … [Maurice] contends that Tracey’s shoe collection … was in the Monaco home and this constitutes proof that she was a Monaco domiciliary. This case is a ‘shoe-in’ for the record books in Monaco — it’s well beyond the ‘War of Roses,’ it’s the ‘War of Louboutins.’ ”

This case, and the high monetary awards, are similar to the Bitcoin cases we recently wrote about and also the case where the wife claimed support that included a wine budget of over $10,000 where the court considered:

 a large figured that had been included in the mother’s annual budget for wine.:

There is a claim of £10,555 per annum for “Wine”. The child is aged seven and does not consume the wine. This appears to be a mixture of wine supplied by the mother to the parents of children when they visit her home, and some general entertaining.

So what do you think?

Would a $122,858 USD a month be enough to meet your budget or would you request more?

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

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Should Support Be Extended When the Recipient Spouse Loses Their Job?

In a recent case called Lawder v. Windsor, the court grappled with the issue of whether a support-paying spouse should have to pay for a longer period if the other spouse unexpectedly loses his or her job.

The couple had divorced in 1998 after 16 years of marriage. In 2000, the husband had been ordered by the court to pay $800 in monthly spousal support to the wife. He continued to make those payments until 2012, when he applied to the court for an order terminating his support obligations.

The husband claimed that in the circumstances, 12 years of paying support had been enough: he was now 56 years old and retired (he took an early retirement option as part of his termination due from a long-held job due to downsizing), and was two part-time jobs earning about $10 an hour. He also received a pension.

On the other hand the wife, now aged 51, was also employed and had enjoyed a steady increase to her income in the past five years. Unbeknownst to the husband, her income during that period rose from $38,000 to over $62,000 in 2012.

The glitch, however, was that the wife had recently lost her job due to corporate restructuring. She had received a termination package, but on the grounds that she was now unemployed she wanted the husband to continue paying support. (The court pointed out that she had provided no proof that she was actively looking for work, however).

The court considered the circumstances, and declined to extend support; it terminated the husband’s support obligations effective one month hence.

The court reasoned that spousal support was designed in part to compensate the wife for any economic disadvantage that she had suffered as a result of the marriage or its breakdown. That goal had been achieved through the husband paying support since 2007; the job loss now had nothing to do with the marriage or its breakdown.

Further, it was clear that the wife had achieved economic self-sufficiency: she had gotten a good job with a high degree of responsibility, and her income had increased steadily in the past five years alone. She had also never asked for a review of the support order and had never taken advantage of its built-in indexing of support amount.

In short: The wife’s recent job loss was not a good reason for extending support now; there was nothing to suggest that her temporary unemployment would affect her self-sufficiency in the bigger picture, and any short-term financial setback was something she could address through her own efforts and diligence.

For the full text of the decision, see:

Lawder v. Windsor, 2013 ONSC 5948  http://canlii.ca/t/g0qb3

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 www.RussellAlexander.com.

Wednesday’s Video Clip: The Need for a Support System

 

Wednesday’s Video Clip: The Need for a Support System

In this short video Russell Alexander discusses the importance of having a support system in place when you go through a divorce.
 
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  www.RussellAlexander.com

Wednesday’s Video Clip: Top 4 points about enforcing child and spousal support payments

 
 

Wednesday’s Video Clip: Top 4 points about enforcing child and spousal support payments

For those ex-spouses who are subject to a court order or have agreed that one of them will pay spousal or child support to the other, there are several points about the enforcement of such orders or agreements that are noteworthy, here are four points to consider:

1. Filing and deduction is automatic.

If the obligation to pay support arises through a court order, these are automatically filed with the Ontario government’s Family Responsibility Office ( or “FRO”). The role of the FRO is to process child and spousal support orders and to provide enforcement support for recipients through various means. The court will also make a “support deduction order” which is filed with the FRO, which directs the paying spouse’s employer to deduct specified support amounts from the paying spouse’s regular pay, and to send those amounts directly to the FRO.

2. Other support agreements filed voluntarily.

In cases where the support obligation comes not from a court order but rather under a domestic contract (such as a separation agreement, cohabitation agreement, or paternity agreement), the support payments can be enforced privately, or if necessary they can still be processed through the FRO. For this to occur, the contract must first be filed with the court, and then filed with the FRO.

3. Enforcement of support payments.

In cases where the paying spouse has not been making the required child or spousal support payments, or has not been making them on time or in full, then the recipient spouse can take legal action to recover the money owed. Potential avenues of individual recourse include having the paying spouse’s wages or bank account garnished, seizing his or her RRSP, or registering the support order as charge or filing a writ on his or her home. The recipient spouse can also request a hearing before a court to obtain an order for payment from the paying spouse, failing which, he or she may be sent to jail. All of these steps can also be taken by the FRO on behalf of a recipient spouse, if the obligation to pay arises pursuant to a court order or if a domestic agreement has been filed with the FRO.

4. Additional enforcement mechanisms through the FRO.

In addition to the list of legal remedies above, the FRO has certain other avenues of recourse and powers available to it, including:

• forcing public officials or individuals to product any records containing information about the paying spouse’s employment and financial circumstances;

• deducting at source any money owed by the federal government to the paying spouse (for example, income tax refunds and/or Employment Insurance benefits);

• suspending the paying spouse’s driver’s license;

• reporting the paying spouse’s default to a credit bureau; and

• taking steps with the paying spouse’s employer to achieve court-ordered enforcement of the support deduction order that has been imposed

We hope you have found this video helpful. If you require further information about enforcing support payments please give us a call or visit our website at www.russellalexander.com

Wednesday’s Video Clip: Top 5 questions about spousal support in Ontario, Canada

 

 

Top 5 questions about spousal support in Ontario, Canada

In this video Russell reviews some of the more common questions about spousal support in Ontario, including:

1) What is spousal support?

Spousal support – which is sometimes called “alimony” – is money paid from one spouse to the other after the dissolution of the relationship. The obligation to pay spousal support is a legal one, and may arise either from a marriage, or from a common-law relationship.

2) What is the legal basis for obtaining spousal support?

The obligation for one spouse to pay spousal support to the other does not arise automatically from the fact that the parties had a relationship together (whether formally married or common law). Rather, the spouse who is claiming spousal support must prove an entitlement to it.

A court may order spousal support, and will set an amount and duration based on various factors that exist between the parties. The jurisdiction for a court to award spousal support comes from either the federal Divorce Act (as part of a divorce order), or from the Ontario Family Law Act.

3) What factors dictate the duration and amount of spousal support?

The determination of how much support a spouse should receive, and for how long, is a complex equation. In making a spousal support order courts consider several factors, including:

• the length of the entire relationship (including time living together before marriage);

• the financial circumstances of each spouse, both during the relationship and
after separation;

• the functions performed by each spouse during the relationship;

• the financial repercussions or detrimental financial effect on one or both spouses of caring for each other or for any children of the relationship; and

• each spouse’s ability to support him or herself.

In some cases one spouse may have suffered a financial loss or disadvantage as result of joint career and lifestyle decisions made during the marriage or relationship (for example the decision to move the family so that a spouse can take a new job, or that the mother will give up her career to stay home and raise the children). A disadvantaged spouse will be entitled to support to compensate him or her for that setback.

There may also be a limit on the duration of the support that one spouse receives from the other, as means of encouraging the recipient spouse to achieve post-separation financial independence as quickly as possible. Alternatively, the order may contain a built-in review mechanism.

Note that there are certain tax consequences relating to spousal support – both from the payor’s and the recipient’s perspective. In short – and provided it is paid pursuant to either a written separation agreement or a court order – it is considered “taxable income” in the hands of the spouse who receives it, and is deductible from the taxable income of the spouse who pays it. These tax ramifications are taken into account when determining the amount of support.

4) How does the spouse’s behaviour affect spousal support entitlement?

Generally speaking, the entitlement to spousal support is not dependent on the spouse’s pre- or post-separation behaviour, morality, or ethical conduct. In other words, a spouse who is otherwise entitled to spousal support after the dissolution of a marriage will not become disentitled because he or she was violent, or because it is later discovered that he or she had an extra-marital affair during the marriage.
Having said that, a court’s determination of the amount and duration of spousal support will hinge upon each party providing forthright, comprehensive financial disclosure to each other. If in making the determination the court feels that one spouse has withheld financial information (e.g. has failed to disclose a source of significant income), the court may impute income to the spouse and award the other spouse his or her support accordingly.

5) What happens if there is a change in circumstances?

As indicated above, the notion of one spouse receiving spousal support from the other is rooted in several concepts and principles, including:

1) the financial disadvantage or dependence that relationship gave rise to must be redressed post-separation; and

2) the ability of the paying spouse to fund the spousal support award must be taken into account.

The amount or duration of spousal support may have to be adjusted if there is significant change in the financial circumstances of either party. This change must be significant, and must not have been foreseen when the separation agreement or the court-ordered spousal support award was made.

We hope you have found this video helpful. If you require further information about spousal support please give us a call or visit our website at www.russellalexander.com

Court Finds Spouse Not Disabled, Merely Afflicted by “Lack of Desire to Work”

Court Finds Spouse Not Disabled, Merely Afflicted by “Lack of Desire to Work”

Kilbreath v. Morgan involved a 16-year common-law relationship. Just before they started living together in 1991, the man had been a talented photographer who was already married with children.  He seemed to be affluent, drove a nice car, and owned two homes.  He left his wife and children in order to be with the woman; in order to provide them with somewhere to live, he broke down the door of one his two houses and the two of them moved in (it was unoccupied, as the wife and children were living in the other one).  However, he asked the woman to pay him rent, in order to maintain their financial independence.

The man and woman lived together until 2006, when the woman told him the relationship was over.   At this point they were living in a luxury condominium together, and despite being separated they continued to live under the same roof until 2007, when the woman finally left.  At this point, she was about 40 years old, while the man was 48.

However – and despite his apparently successful photography career – the man had stopped working in 1992, i.e. one year into their relationship.   This was because as part of the divorce from his first wife (which was described as one of “extremely high conflict”), there were several hundred thousand dollars place in a trust fund, and he received “monster chunks of money” approximately every six months, which he used for his living expenses.   In 1999 he received the final $200,000 as part of a lump-sum settlement.   He used some of this money to buy about $30,000 in digital photography equipment, including a $15,000 camera.

The man apparently needed time to “master his equipment”, which took more than a year.      He then claimed to need an agent because he was (as he put it) “a great artist but a terrible sales agent.”  Another 12 to 18 months went by, but no agent had been hired.  At this point, the woman started to insist that he find gainful employment.

Finally, in around 2003, he declared that he was too sick to work as a professional photographer, claiming that he suffered from a chronic sleep disorder, chronic anxiety, and chronic depression.  The woman urged him to see a doctor, but he did not go.  Having run out of patience, she threatened to end the relationship, and in 2006, made good on that promise.  Moreover, the woman had to resort to taking formal legal steps to try to get the man to move out of condominium.

At this point the man sought spousal support, claiming that the woman had a social, moral and ethical responsibility to support him for the rest of his life.  The woman moved out, but she continued to pay the mortgage, condominium fees, property taxes and insurance amounting to about $1,600 per month.   As part of a separation agreement reached in 2007, she agreed to pay the man temporary spousal support of $2,000 per month, and she also paid the first-and-last month’s rent (totalling about $2,500) on the new accommodations he was renting.  

(Meanwhile, the man still had not vacated their condominium, and was ordered by the court to move out in March of 2008, failing which he would be ejected by Toronto Police Services.   He eventually did move out on precisely that date, although police intervention was not required).  

The question for the court was whether the man was entitled to spousal support from the woman on a going-forward basis.  The woman claimed that the man was fully capable of earning income that would make him self-sufficient, and that her temporary spousal support payments should cease immediately or at least be gradually reduced to zero over the course of the coming months.    Her assessment of his approach to finding work was reflected in the following passage from the court’s judgment:

40         Mr. Frenkel [the man’s lawyer suggested that [the woman] thought that the reason [the man] had not worked since 1992 was because he was lazy. She said that he didn’t work for the first few years because he didn’t have to and then he got into a pattern in which he was very comfortable. She agreed that he sometimes expressed frustration that he could not find “meaningful work”. He refused to do “meaningless work”. He wanted to use his skill and talent in photography in an appropriate way as opposed to having rules and boundaries on his talent. As an example, if the going rate for photography for a wedding was $1500, she wanted him to undercut that just to get his name out and he refused because “his talent was worth more than that”. When she pushed him to sell his images on line, he would get frustrated with her and say “I’m not going to sell my soul, I’m not going to give my work away for $50.”

The court began the task of determining the man’s entitlement to spousal support with an assessment of the parties’ credibility.  First of all, it found that although the woman was clearly angry with the man, she gave her evidence in a straightforward and credible manner, and demonstrated a good memory of events.    In contrast, the court assessed the man (among other things) as having “no respect for people and institutions that do not meet his expectations” and indicated that he was “prone to exaggeration.”  More importantly, the court saw no evidence of the fatigue, lack of alertness, or lack of focus about which the man complained and on which he relied in order to avoid having to find gainful employment to support himself.

Next, after reviewing the medical evidence and reports of various experts, the court found nothing to suggest that the man was unemployable or that he could not become self-sufficient.   Although the man did suffer from chronic, low-grade depression, he was not “disabled” to the extent that he could not work.  Indeed, the evidence showed that he was part of a large and active network of internet-based photography devotees, some of whom he voluntarily “mentored”; he also had extensive websites where he posted garnered compliments on his photography.   Rather, the man was deliberately avoiding contributing to his own support because he was too proud of his photography accomplishments to sell the product of his work, and because he was under the misapprehension that the woman had a responsibility to support him for the rest of his life.  

In the end, the court found the man “is capable of using his skills as a photographer to be self-sufficient but he will do nothing until he is ordered to do so…. [he] is capable of working and the only thing holding him back is his own lack of desire to work.”

The court accordingly ordered that the woman’s obligation to pay the man spousal support – which she had already been doing for 10 years at the time of trial – was to permanently end in December of 2012.

For the full text of the decision, see:

Kilbreath v. Morgan, 2012 ONSC 2494  http://canlii.ca/t/fr573

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  www.RussellAlexander.com

Can the Court Change the Terms of a Dead Person’s Divorce?

Can the Court Change the Terms of a Dead Person’s Divorce?

Last week I wrote about the question of whether a deceased person’s Estate is obliged to continue to pay support to a surviving spouse. This week, in another post, I wrote about whether retroactive support obligations can still be pursued from the Estate of a former spouse who has passed away.

A third, related question is whether the court has a right to retroactively vary the support terms of a Divorce Judgment involving someone who has already died. This was the precise question that arose in an older B.C. case called Despot v. Despot Estate.

The Divorce Judgment between the spouses in that had provided for the wife to receive $500 per month in “maintenance” (which is the term for spousal support order as part of a divorce under the federal Divorce Act). This was increased to $800 per month while both parties were living. It is important to note here that there had also been an earlier separation agreement that also provided for the wife’s support until she remarried or until her death (whichever came first). However, this separation agreement was never incorporated into the Divorce Judgment.

The husband died in 1990. The wife contacted the Estate’s lawyers with a view toward having the $800 per month in spousal support continue; the Estate was not convinced it had the obligation to do so. The wife applied to the court for an order confirming the Estate’s obligation in this regard.

The court considered its ability to make the order requested. First, it untangled a good deal of old and sometimes-contradictory legal precedent (including decisions from Ontario). After doing so it found as follows: the husband’s ongoing obligation to pay spousal support under either the separation agreement or the Divorce Judgment ended the moment the husband died (unless there was a specific agreement between the parties that it was to continue after death and bind the Estate).

This is because the right to receive spousal support under the Divorce Act is a personal right that can only be enforced during the lifetime of the spouse who holds the order. But the same works in reverse, in connection with the death of the person who is paying being paid. Quoting from another decision in a case called Public Trustee of British Columbia (Price Estate) v. Price, the court reiterated:

“A person is a spouse only while married. After the marriage ends a former marriage partner becomes a former spouse. But once a person dies, all that is left is a corpse, an estate, and a personal representative. The corpse is not a person at all. The estate is only a legal concept. The personal representative could be a corporation. None of them is either a spouse or a former spouse.”

In other words, spousal support order cannot be proactively made once the person required to pay is dead, because that person is no longer considered a “spouse” in law. More to the point, a court cannot impose a new obligation on the husband’s Estate that he did not himself have during his lifetime. The court pointed out that there may even be constitutional principles that would prevent such an order.

Here, at the time the Divorce Judgment was made, the wife essentially had to make an election between two choices: either she could rely on the provisions of the separation agreement and not claim any maintenance under the Divorce Act, or else she could claim maintenance. These remedies were alternative ones, and not cumulative. The wife in this case had chosen to take her support via the Divorce Judgment and the maintenance order contained within it. Once the husband died, the order was no longer in effect. The court had no authority to vary it after-the-fact.

In the end, the wife’s application to vary was dismissed.

For the full text of the decisions, see:

Despot v. Despot Estate, [1992] B.C.J. No. 1902; 95 D.L.R. (4th) 62 (B.C.S.C.)

Public Trustee of British Columbia (Price Estate) v. Price [1990] 4 W.W.R. at 52

Russell Alexander Family Lawyers work exclusively on divorce law and family related matters, including custody, spousal support, child support, alimony and separation. For further information, or to schedule an appointment, call 1.905.655.6335.

 

 

Spousal Support – Are You Still on the Hook After You Die?

 

Spousal Support – Are You Still on the Hook After You Die?

Even the most thorough of separation agreements and court orders can overlook one important scenario:  What happens to spousal support obligations if the paying spouse dies?  Is the estate of the deceased’s spouse’s still obliged to pay?

Unfortunately, many separation agreements and court orders are silent on this issue, and in the event of the paying spouse’s death it often becomes an issue to be disputed with the estate and, ultimately, put before a court to resolve.    The court’s role in these situations is to try to deduce both parties’ unstated intentions from the wording of the agreement or order.   To do this, courts may look at not only the clause dealing with support, but also at other clauses in the document as well.  For the interpretation of separation agreements, the court will have a broader range of information available; for example it may look at the circumstances that existed at the time the agreement was entered into.  In contrast, a reviewing court’s capacity to interfere with an earlier court order dealing with support is relatively limited, but it is still possible.

Naturally, the outcome will depend on the facts and circumstances of each case.  Courts will also consider numerous legal factors including contractual elements, the legislated objectives of the family law regime, and the common-law concept of “fairness”.    In Ontario, the Court of Appeal in Linton v. Linton tackled the question of whether the court had the jurisdiction to make an order for spousal support that extended the obligation beyond the paying spouse’s death, effectively binding his or her estate.  It found that although the Divorce Act had no specific provision allowing for such an order, the overall policy of that Act favoured such an approach, and this approach was amply supported by the jurisprudence.  This same conclusion on jurisdiction has been reached in other Canadian provinces, and a survey of the cases suggests that overall courts are increasingly willing to conclude that support payment obligations can extend beyond death.  

Moving past the legal framework, however, the case-by-case outcomes are never predictable.  Certainly, the wording of individual agreements and orders can vary widely, but even with similar wording the cases from across Canada have differing results.  

For example, the Ontario case of Baker v. Baker dealt with an agreement between the spouses providing that spousal support payable by the husband was to continue for the duration of the recipient wife’s “natural life”.  The court concluded that when the support provision was read together with the provision that bound the husband’s estate, it was clear that the parties intended that the payments continued as long as the wife was alive, and therefore the obligation survived the husband’s death.

On the other hand – and perhaps surprisingly – in the Saskatchewan decision of Myrden v. Myrden Estate a provision in a separation agreement stipulated that support would be “paid by the husband to the wife for life”.  That clause was held to mean that the wife’s support was only payable as long as the paying husband was alive; it terminated upon his death and his estate was not liable to continue paying her.

In these two cases, the court at least had a written provision to refer to (however unclear) and therefore had some indication of what the parties’ intentions might have been.   But in other cases, courts have sometimes found that a contractual obligation to pay post-death spousal support can arise even where there is no express wording to this effect.

This being the case, whenever spouses are considering entering into a separation agreement it is important obtain advice from a family law lawyer in advance, so that the question of whether and how support obligations will continue after the paying spouse’s death is clearly and unambiguously reflected in the resulting document.   If the agreement is silent on the question, not only will the surviving spouse be unclear on his or her rights, but the resolution of the question may become costly and the legitimate estate-planning objectives of the spouse who has died may be frustrated as well.

For the full text of the decisions, see:

Linton v. Linton (1990), 30 R.F.L. (3d) 1 (Ont. C.A.)

Baker v. Baker (1976), 1976 CarswellOnt 185, 28 R.F.L. 78 (Ont. H.C.)

Myrden v. Myrden Estate (1981), 1981 CarswellSask 72, 12 Sask. R. 115 (Sask. Q.B.).