Joint Title with Children

A joint title between spouses is a good way to avoid probate fees between spouses.

However, a joint title with your kids is not always a good idea for the following reasons:

1. You lose control of the property.   Your children will have to consent to any sale and if they want the property for themselves, you have a court battle ahead of you.

2. Your children’s creditors can claim the property and register a judgment against it.

3. Your children’s ex-spouse can claim half of your child’s share of the property.

4. If you have several children on title, and one dies, there is nothing for the grandchildren.   The surviving kids take it all.  All it takes is a car accident.

5. The transfer of non principle-residence property is a disposition for income tax capital gain purposes.

If you are going to put a child onto a joint bank account for you so they can pay your bills, make sure you advise the bank and your child, in writing, whether or not you want that child to get the remaining money when you die, or it belongs to your estate.

Interesting aside, the husband dies and has a bank account in his sole name.   The husband has no will.   The bank refuses to transfer funds to surviving spouse until provided with Letters of Administration.  The lawyer has to be hired and legal fees are incurred.   As stated, the above Joint Title between spouses is a good way to avoid probate fees.

David R. Barth

Separation Agreements

When separating from your spouse fighting in Court is an expensive proposition for both parties, it is much faster and easier to agree than to spend tens of thousands of dollars on lawyers and court costs.

Separation Agreements also have the advantage of certainty. You know the end result, right now.   After months or years of fighting, at Trial a Judge imposes a decision on both parties, and often neither party is happy with it.

Separation Agreements can specify Child Custody, Access, Child Support, Children’s expenses, Spousal Support (or lack thereof), and division of Family Property.   It should be road map of where things are going in the future.

I always tell clients to make sure their spouse will sign before preparing a Separation Agreement.   There is nothing more frustrating than spending hours preparing an agreement that the other spouse won’t sign.

Once the agreement is prepared and both spouses agree to sign it, the other spouse will have to get independant legal advice from a different law firm before they sign.   That’s why separation agreements are so hard to overturn.   Both parties had a lawyer tell you what you were signing before you signed it.

When applying for a Final Divorce, the Judge will want to read the Separation Agreement to make sure everything has been settled.

If you have any questions about Separation Agreements, give me a call.

David R. Barth

Asset and Income Protection

Life Insurance provides your dependents with a replacement for your income when you die.

Disability Insurance provides replacement income if you can’t work.

Marriage and Divorce are also major life events that can have a big impact on your life. Below is a checklist of what you can do legally before you marry or after you separate to protect your income and assets.

Legal Checklist for Divorcing Clients

-spouse not only means married couples, but couples that have lived together for more than 24 months.

__ Separation Agreement (for Family Property)(required for refinancing in one spouses name)

__ Separation Agreement (for Child Custody, Access, and Support)

__ Separation Agreement (for Spousal Support, or lack thereof)

__ New Will (Divorce cancels current Will) (can be done in contemplation of future Divorce)

Legal Checklist for Marrying Clients

__ Inter-spousal Agreement (for division of Family Property and debt on future Separation)

__ Title in Joint or Sole Names (presumption of equal sharing at Separation if in Joint names)

__ Inter-spousal Agreement (Assets owned by one spouse jointly with 3rd party (ex. your business partner))

__ Inter-spousal Agreement (Spousal Support)

__ New Will (Marriage, or living together for two years, cancels your current Will)

David R. Barth

Workplace Harassment

I was talking to a psychologist and we started talking about harassment in the workplace.   I said I came accross it from time to time and my advice was always “Don’t quit.   Whatever, you do, don’t quit.   Talk to a psychologist to help you overcome the harassment.”

The Psychologist said workplace harassment was a common issue.   The Psychologist also said the first piece of advice was “Don’t quit”.

So if you are being harassed at work, don’t quit, and seek professional help.   Your workplace may have counselling available. If you don’t know then ask.

David R. Barth

Car Accidents With Out of Province Drivers

I was rear ended one day by a Quebec driver. After parking somewhere safe, I got his licence information and personal information.
In Saskatchewan ,we have SGI, and the plate registration and insurance are the same. Unfortunately, Quebec does not have SGI, and there are many different Insurers in Quebec. If SGI can’t locate the Quebec driver’s Insurer, I have to pay my deductible.
Always ask an out of province driver for their insurance information as well as their registration and personal information.
The Quebec driver called and provided his insurance information. I was relieved.

David R. Barth

Affidavit for Reduced Fee Transaction

I had given a client a real estate quote for transferring title from the spouse’s sole name into joint names.   I was surprised when the client said that another firm had quoted twice as much for Land Titles transfer fees.

When transferring title and one of the names on title remains the same, Land Titles will usually charge half the standard fee.   This happens often when parties seperate and one spouse comes off the title and the other remains.   Another example is when one person is on title and adds the spouse, for example to qualify for a higher mortgage amount on a refinance.

This does not apply to an application to transfer to surviving joint tenants because the fees for that are already greatly reduced.

David R. Barth

Risks of Giving Money to Your Child

Parents often want to help their children buy their first house.  Often they give their child a large amount of money towards the purchase.   The child then makes the regular monthly mortgage payments.

The problem is that if the child divorces, half the money you gave your child then goes to their ex-spouse.  This is not the parent’s usual intention.

The only way to avoid this problem is to transfer money to your child as a loan instead of a gift.  The terms and conditions of the loan will have to be in writing and signed by your child and their spouse.   The document should include the amount of the loan, the purpose of the loan, the interest rate if any, and the fact that the loan is due on demand, or on the event of your child’s separation from their spouse.

Separating spouses often claim that the money given to them by their parents was a loan, but without any supporting documents, it is almost impossible to prove.  Taking a few minutes to document the loan will save a lot of future grief.

You can forgive the loan to your child in your will, or at any other time you wish.

Keep in mind that some banks will require you to sign a document called a gift letter saying that the money your gave your child was a gift.  Experienced counsel will know to look for that gift letter.  A judge will then have to decide on the conflicting evidence whether or not the money was a loan or a gift.

David R. Barth

Farming and Divorce

Farming these days is big business.   It involves big expensive machines, lots of pricy farmland, and sometimes big profits.   Can you afford to give half of it away to your former spouse?

Under the Saskatchewan Family Property Act, farmers get to keep the property they had when married, but not the property’s increase in value during the course of the marriage.  The home quarter also gets split 50/50 even if owned prior to marriage.   In a typical long term farm marriage, most of the land was purchased after marriage, or increased greatly in value after marriage.   Which means a farmer getting divorced is going to be severely hurt financially.

What’s the solution?  If you are a farmer just getting married sign a pre-nuptial agreement BEFORE the marriage.  It will be the best investment you ever made.  If your proposed spouse refuses to sign, get a new spouse (by the way that’s relationship advice, not legal advice).

If you have been married for a long time?  I have no solution.   An interspousal agreement could be signed but your spouse won’t want to sign it and raising the issue could lead to divorce.  Her lawyer will almost certainly tell her not to sign it and the lawyer almost certainly won’t sign it either.   I wouldn’t (and haven’t).

If you are a long time farmer getting divorced from a long term spouse, bite the bullet, and try to get everything settled quickly.   Fighting in Court is only expensive, stressful, time consuming, and emotionally draining.  Neither party will be happy in the end.

Oh, and don’t buy a brand new Corvette.   That never helps.

And if you are thinking farmer means a man, think again.   Everything I am writing here applies to both women and men.  Farm women often have lots of farmland in thier own name, or inherit it from their deceased or former husbands.

This is generally what occurs after a farm divorce, but every farm divorce is a little different so you should contact a lawyer to get advice for your specific situation.

David R. Barth

Support and Passports

If you don’t pay your child or spousal support, the Maintenance Enforcement Office has the power to cancel your passport.  MEO does it by making a request to Passport Canada, who usually complies with the request.  Passport Canada then sends a letter to you requiring you to return the passport to an embassy or Passport Canada in a fixed period of time.   If your passport is almost expired, you will not be able to apply for a new one.

Losing your passport means – if you are working outside of Canada, you have to return to Canada.  That means you will probably lose your job.

I have had several clients with this problem and the only way to resolve it is to pay the support or return to Canada.  Once you pay, the Maintenance Enforcement Office can get your passport returned fairly quickly.

David R. Barth

Spousal Support and Revenue Canada

There is a difference between the way Revenue Canada treats child support and spousal support.  When you pay spousal support it is deducted from your income and added to the income of your ex-spouse.  Child support is not deducted from the payor’s income, nor added to the payee’s income.

Canada Revenue Agency does require that the payment be pursuant to an agreement or Court Order.   It is possible to have past spousal support included in this agreement.   So if you have been voluntarily paying spousal support, make sure you have the past support included in your agreement or Court Order.

An interesting twist is how Revenue Canada treats legal fees for spousal support.   If you are applying to get spousal support, a source of income, Revenue Canada allows you to deduct the legal fees as an expense on your taxes.   If you are fighting against paying spousal support, you cannot deduct the legal fees. Revenue Canada says it is not an expense incurred to gain income.

David R. Barth