and found that the parties were not spouses
as defined by either the old or new legislation. In making his decision, the justice noted
that: 1) The parties had not mingled their
finances; 2) The parties never shared legal
rights to their accommodation; 3) Neither
party had surrendered economic independence to the other so as to become dependent
on the other; and 4) Even though the parties
had shared living accommodations, they had
not committed to a permanent relationship.
According to the court, if such a commitment
had existed, it would have manifested itself
in 2010, with the male party providing care
for the female party while she recovered
from her stroke.
Considerations and tips
The expanded definition of spouse under
the new provincial Act could give rise to an
increase in the number of litigious claims
made by cohabitating partners in British
Columbia. Accordingly, here are four practical
tips to consider when dealing with owner/
manager clients who are contemplating cohabitation, marriage, separation, or divorce
(note: most of these tips can also be used for
married clients as well).
1. Update your engagement letter, as your
obligation of confidentiality may not
preclude being compelled by lawful authority to disclose your client’s financial
information. In your engagement letters,
consider adding terms which provide that
in the event that you are compelled by a
court order to provide any documentation or evidence in “divorce” proceedings,
you will be compensated accordingly.
2. Alert your client to the fact that if a
claim is ever made against their business
or personal assets by their cohabitating
partner, aka “spouse,” you could be
precluded from providing any assistance
if you have also been providing professional services to their spouse. If your
client has concerns about this possibility,
be sure to avoid—to the fullest extent
possible—including any services for their
spouse as part of your overall retainer.
3. Advise your client to rethink the use of
excluded property. Under the FLA, a
spouse’s excluded property will consist
of property owned by the spouse at the
date the parties began to cohabitate. It will also consist of certain property acquired after
the start date of cohabitation, such as: gifts and inheritances; certain kinds of settlements;
court awards and insurance proceeds; property held in trust for the spouse; and property
acquired with excluded property (excluded property is presumed to remain the property
of the owning spouse).
Example: Inheritances. Instead of using an inheritance to pay down the mortgage on the
family home, which normally might make sense, your client may want to consider paying
off debts that are strictly personal. Alternatively, you could advise them to deposit the
funds into separate investments (such as a personal TFSA or RRSP account, as opposed
to a spousal account)—especially if the ɔ