Experiences are vital to navigating complex financial matters
When dealing with equalization in family law matters that involve complex assets, make sure the right people are involved, says Mississauga family lawyer Deepa Tailor.
“If there is a business or intricate finances in the equation, you need a family law lawyer — at the outset, not later — who has experience with these types of cases and can put together a financial record for the court,” says Tailor, managing director of Tailor Law Professional Corporation.
“Your family law lawyer will act as your advisor and will bring in an accountant or a business evaluator if needed, so you have a good sense of what the assets in question are worth,” she tells AdvocateDaily.com.
When a separation jeopardizes your financial security.
Tailor says a common situation that arises is when one spouse owns an enterprise, and the other is an employee. The court will take into consideration that both parties are reliant on the business for their incomes.
“One spouse often helps the other spouse build their business together,” she says. “Even if they stayed at home, their efforts allowed their partner to devote time to the business.”
While an equalization claim can’t be made with common-law couples in the same situation, since there’s no matrimonial property, Tailor says there is still an equivalent remedy.
“There is potentially a constructive trust claim there, since the common-law spouse probably contributed significantly to household expenses, or dedicated a lot of time to help build the business and acquire assets,” she says.
If a married couple divorces, the business owners who put their assets into their spouse’s name could regret that decision.
“While there is some merit to that strategy in a business sense, it has now backfired,” she says.
A prenuptial agreement is a legal document that helps protect someone’s assets in case of divorce.
Tailor says in many cases higher-income spouses try to hide assets or their savings if the marriage ends in divorce.
“That’s where the power of disclosure is going to be relevant,” she says. Draft a cohabitation agreement to protect yourself if your marriage fails.
This post was first published on AdvocateDaily.com (which is now Inactive). This is a re-published article.
By Paul Russell, AdvocateDaily.com Contributor. October 2, 2019