The Double Dip: Why You Shouldn't Pay Twice on the Same Asset
If you equalized your pension or business value as an Asset, you shouldn't have to pay Support on that same income stream. Understanding the Supreme Court's Boston v. Boston ruling.
Legal Review: This complex financial guide was reviewed by Deepa Tailor, Senior Family Lawyer, to ensure compliance with the principles of Boston v. Boston [2001] SCC 43 regarding double recovery.
Too Busy to Read? The 30-Second Answer
How the Double Dip Happens
Imagine you own a business worth $1,000,000.
The Equalization (The Asset)
You pay your ex $500,000 cash today to buy out their share of the business value. They have received their half of the capital.
The Support (The Income)
Next year, you draw a $100,000 salary from that same business. Your ex asks for $3,000/month spousal support based on that salary.
The Conflict
You effectively paid them for the future earnings of the business in Step 1. Asking for support on that income now is asking to be paid twice.
Does This Apply to You?
The Pension Dip (OMERS/Teachers)
Scenario:
A retired teacher's pension is valued at $800k. The spouse gets half the value in the divorce settlement.
The Strategy:
When the monthly pension checks start arriving, the Payor argues: "I already bought you out. These checks are my capital return, not income." Support should be $0 (or significantly reduced).
The Business Dip
Scenario:
A company is valued based on its "Earnings" (EBITDA). The owner pays the equalization.
The Strategy:
The owner argues that the salary they draw is simply the realization of the value already divided. Caution: This only applies to the investment income, not "working wages" for labor provided.
When Can They Double Dip?
Protected
The Liquidated Spouse
If the Recipient spouse used their equalization payment to buy a reasonable house and invest for retirement, courts will uphold the Boston Rule and stop support.
The Exception
The Hardship Case
If the Recipient spouse has exhausted their capital on reasonable needs and is facing poverty, the Court may allow Double Dipping to ensure they are supported. The "Need" of the recipient trumps the "Fairness" to the payor.
Common Questions About The Boston Rule
Related Resources
Imputing Income: When Tax Returns Lie
Learn how courts calculate income when financial statements don't tell the full story.
Financial Statement (Form 13.1): The Math of Divorce
A line-by-line guide to completing the most important document in your case.
Bankruptcy & Divorce: Asset Protection
Understanding how bankruptcy intersects with family law obligations.
Protect Your Pension. Protect Your Business.
Double Dipping claims can cost you hundreds of thousands over a lifetime. We build the complex legal arguments needed to shut these claims down.
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Deepa Tailor, Senior Family Lawyer
Deepa Tailor is the founder of Tailor Law. She specializes in High-Net-Worth asset division and defending against double-recovery claims in complex pension and business files.
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