A question we are consistently asked as estate lawyers is “who inherits when someone dies without a will?” This is an issue that is all too common in Canada, as a recent study found that over half of Canadians do not have a will in place. This article aims to help you better understand how an estate will be distributed in British Columbia when a person dies without a will.

When a person has died without a will the estate is legally referred to as an “intestate”. Since there is no will to specify who will inherit the deceased’s assets, distribution of the estate in British Columbia is determined by the rules set out in the Wills, Estates and Succession Act (WESA). Distribution under these rules can either be very simple or quite complex depending on the deceased’s family structure.

Distribution where there is a surviving Spouse or Descendants

If a person dies leaving a spouse but no surviving descendants, the entirety of the estate will simply go to the surviving spouse. Descendants are defined in WESA as all lineal descendants (eg. Children, grandchildren, great grandchildren).

If a person dies with descendants but without a surviving spouse, the estate will be distributed equally among the deceased’s descendants per stirpes. This generally means that an equal share of the estate will go to each of the deceased’s children. However, if a person’s child had died before them, that deceased child’s surviving descendants will equally divide their share. To better illustrate, consider the following examples:

• The deceased has no spouse, one surviving child, A, and one deceased child, B, who has two surviving children. One half of the estate would go to A, and one quarter would go to each of B’s children.

• The deceased has no spouse, one surviving child, A, and two deceased children B and C. B has three surviving children, and C has one surviving child. One third of the estate goes to A, one third of the estate goes to C’s child, and 1/9 of the Estate goes to each of B’s three children.

Distribution where there is a Spouse and Descendants

If a person is survived by both a spouse and descendants, then before any distribution the surviving spouse receives all of the deceased’s household furnishings, and a preferential share of the estate. The amount of the preferential share depends on whether the surviving descendants are also descendants of the spouse. If all of the descendants are descendants of the spouse and the deceased, then the spouse’s preferential share is $300,000. However, if any of the surviving descendants are not descendants of the spouse, the spouse’s preferential share is $150,000. If the total value of the estate is less than the spouse’s preferential share, then the spouse receives the entirety of the estate. If the estate still has remaining value after the surviving spouse receives their preferential share, the spouse will receive 50% of the residue, and the deceased’s descendants will divide the other 50% of the residue per stirpes.

Distribution where there is no Spouse or Descendants

If the deceased has no surviving spouse or descendants, then the estate will be distributed to the deceased’s relatives based on the priority schedule set out in section 23 of WESA. Under this priority schedule, each line of relatives must be exhausted before the next line can inherit. The order of distribution is:

1. Parents or parent
2. Siblings
3. Nieces and Nephews
4. Great Nieces and Nephews
5. Grandparents
6. Aunts and Uncles
7. Cousins
8. Great Grandparents
9. Great Aunts and Uncles

It is also important to note that inheritance rights only extend to relatives within four degrees of kinship. A cousin’s child for example, cannot inherit because they are five degrees of kinship away from the deceased: (1) parents, (2) grandparents, (3) uncles/aunts, (4) cousins, and (5) cousin’s children. If there are no surviving relatives within four degrees of the deceased, the entire estate will go to the government.

We hope that this article has helped you gain an understanding of what happens when a person dies without a will. If you need help with your estate planning, or you have had a loved one pass away and you would like assistance in understanding what you and your family may be entitled to, please give us a call at 604-449-7779.

If you are going through a divorce in BC or separation, one of the most important and likely contentious issues to deal with is how property will be divided between you and your spouse. This article will explain how property is divided after divorce or separation.

The law on division of property in British Columbia is governed by the Family Law Act (FLA) which applies to both married spouses and marriage-like relationships. To determine if property division applies to your separation, you can read our post on “When do I become a spouse for the purpose of property division under the Family Law Act in B.C.?” Under the FLA, each spouse is entitled to an equal division of all family property and debt.

What is Family Property and Debt?

The starting presumption is that all property and debt acquired during the marriage or marriage-like relationships is Family Property and is therefore subject to property division. This also includes any appreciation of property that was acquired before the relationship. However, if you have a prenuptial agreement, a marriage agreement, or a cohabitation agreement, you may have already agreed that certain property is excluded from division. In addition, the FLA considers certain types of property to be excluded property which will remain one spouse’s separate property after separation. For example, inheritances, gifts from a third party, and a settlement or an award of damages as compensation for loss or injury are all considered excluded property and are subject to division of property. You can find out more about excluded property in our Guide to Excluded Property.

So how do you determine what property should be divided, and what property should be excluded? There are two basic ways to do this: through an agreement, or by court order.

Separation Agreement

Property and debt can be divided by reaching an agreement with your spouse on who will keep what. To make sure that the agreement you reached is enforceable, it should be in the form of a written Separation Agreement. This is a contract between you and your spouse which will outline what property will be kept as separate property, what property is family property, and how family property will be divided between you. You and your spouse should both get independent legal advice regarding the Separation Agreement as certain rights are afforded to each of you under the Family Law Act, and you both need to be made aware of these rights when you make an agreement. This is very important because a court may set aside an agreement on property division if they determine that the agreement was not reached in a fair manner, a spouse did not understand the consequences of the agreement, or if they deem the agreement to be significantly unfair. If you and your spouse are having difficulty reaching an agreement, you can utilize alternative processes such as Mediation or Collaborative Divorce to assist you in finding common ground.

Court Order

If you are unable to agree with your spouse on how property should be divided, you or your spouse can start a family proceeding and apply to the court for an order respecting property division. The court will determine what is family property and debt, what is excluded property, and how family property and debt will be divided. While the presumption is still that family property and debt will be divided equally, the court may also make an order for an unequal division if it determines that it is significantly unfair to divide family property and debt equally. There are a variety of factors which are considered in determining whether there should be an unequal division of property including the duration of the relationship, one spouse’s contribution to the career of the other spouse, and whether a spouse has acted in bad faith by disposing of or converting family property to decrease its value.

Overall the division of property can be quite complicated and confusing, and we always recommend you consult with a legal professional to make sure you understand all of your rights.

We hope this article on division of property has helped you understand better how property is divided after divorce in BC or separation. If you and your spouse are going through a divorce or separation, please give us a call at 604-449-7779 and we would be honored to assist you.

What is a Shareholders’ Agreement?

A shareholders’ agreement is an agreement between the owners, or shareholders, of a company that sets out how the company will conduct its business and sets out the terms of the relationship between the shareholders with respect to the company.

Some of the issues a shareholders’ agreement can address include:

• How the shareholders will financially contribute to the company;
• What the individual shareholders will be doing for the company on a day-to-day basis;
• How will profits be split;
• How a new shareholder can buy in to the company;
• What to do if a shareholder wants to sell their shares;
• How to prevent a shareholder from selling shares to someone you may not want to do business with;
• What to do if there is a death of a shareholder;
• What will happen in the event of a divorce of a shareholder.

The Benefits of a Shareholders’ Agreement

There are many benefits to having a shareholders’ agreement. By addressing potential issues in advance, the agreement can save shareholders thousands in future legal costs and the headache resulting from such conflicts. Further, you can outline how disputes are to be resolved in your agreement.

Other benefits of a shareholders’ agreement include:

• Protecting minority shareholders and their interests;
• Allowing shareholders to keep certain aspects of their agreement private because unlike some other corporate documents, they are not accessible by the public;

If you would like to discuss how a shareholders’ agreement may benefit your company, please give us a call at 604-449-7779 or fill out our contact form. We would be honoured to be of service.

What is a Will?

A will is a critical part of your estate plan that, among other things, allows you to distribute property as you wish upon your death, appoint an Executor to administer your estate and make funeral and burial arrangements, and appoint guardians for your children. In your will, you may create a testamentary trust.

A will is valid once it is written, signed, and witnessed by 2 people over the age of 19. However, the will does not take effect until the will-maker passes and can be revoked at any time until their passing.

What is a Trust?

A trust is a relationship where a person holds trust property (the “trustee”) for the benefit of others (the “beneficiaries”). There are three main parties to a trust, the settlor, the trustee, and the beneficiary. The settlor is the person who initially transfers property to a trust. The settlor enters into an agreement with a trustee, whereby the trustee agrees to hold the trust property for the benefit of the beneficiaries under agreed upon terms. For example, a parent (the settlor) gives money to their child (the trustee) to give to the school (the beneficiary) for school fees.

To establish a trust, three certainties must be met. First, there must be a certainty of intention, certainty of subject matter, and certainty of objects. Certainty of intention means it must be clear that the settlor intends for a property to be held in trust. Certainty of subject matter means that the trust property must be clearly identified. Finally, the certainty of objects means that the beneficiaries or purpose of the trust must be identified.

There are two main types of trusts: an inter vivos trust, which is a trust created during a person’s lifetime, or a testamentary trust, which is trust formed upon a person’s death through the instrument of a will.

Inter vivos trusts are useful for tax planning, estate planning, or other purposes. Testamentary trusts can be created to manage financial resources on behalf of dependent beneficiaries including minor children or beneficiaries with disabilities.

We at MJ O’Nions Lawyer & Mediator can assist you with your preparing your will or trust agreements. Give us a call at 604-449-7779 or contact us. We are here to help!

What percentage of your income do you have to pay in child support?

Under the Child Support Guidelines, the percentage of income that is payable in child support is dependent upon the parenting time that is allocated to each party, number of children as well as the incomes of each party.  You can use our Child Support Calculator to calculate the amount that may be payable from one parent to the other.

Is child support mandatory in Canada?

Generally, child support is mandatory to provide financial means for the care of the children. In fact, the legislation imposes a duty on parents and guardians to provide support for their children (Family Law Act, s. 147(1)).

However, there are a few circumstances when child support is not mandatory as follows:

• No child support is payable in British Columbia when the income of the paying spouse is under $12,000.
• Child support may not be payable when a child is living primarily with a spouse who has substantial means to support the child and does not wish to receive support from the other parent.
• Other circumstances in which child support is not mandatory is specified in the law respecting child support. Specifically, section 147 of the Family Law Act stipulates that child support is not payable when the child is (a) a spouse, or (b) under 19 years of age and has voluntarily withdrawn from his or her parents’ or guardians’ charge, except if the child withdrew because of family violence or because the child’s circumstances were, considered objectively, intolerable.

Do you still have to pay child support if you have 50 50 custody?

In a shared custody (where the child lives with each parent for at least 40% of the time, over the course of a year), both parents will have to pay each other child support. There are two possible scenarios in this case:

• When the incomes of both parents in a shared parenting arrangement is exactly the same, this results in each parent paying the same amount of child support to the other:

For example, if the child lives 45% of the time over the year with you and the other 55% with your spouse and you both earn $60,000 annually, then both of you will be paying $567 in child support to the other parent. However, in actuality, since the amount paid by each parent to the other is the same, there is no extra payment by either party in support as both amounts are set-off against each other.

Please note that while it may seem redundant for the parties to make the payments in the same amount to each other, it may be necessary to do so in order to qualify for certain tax credits with the Canada Revenue Agency.

• When the incomes of both parents in a shared parenting arrangement are not exactly the same, this results in extra payment in support to the lesser earning parent:

For example, if you earn $80,000 and you have shared custody of one child, you would pay $765 to your spouse. Under the same parenting arrangement, if your spouse earns $60,000, the amount that your spouse would pay you is $567. The payments by each parent to the other are set-off against each other, resulting in the lesser earning parent (with $60,000 income) earning $198 extra in support payments.

What is covered in child support?

The Federal Child Support Guidelines calculates Child support as a base amount of support depending on the payer’s income, which covers general support for the child. Other than the base child support amounts there is also special or extraordinary expenses, which are not included in the base amount of child support. These amounts of extraordinary expenses also known as section 7 expenses are listed on the Federal Child Support Guidelines as follows:

• “child-care expenses that you may have to pay as a result of a job, an illness, a disability, or educational requirements for employment if your child spends most of the time with you;
• the portion of your medical and dental insurance premiums that provides coverage for your child;
• your child’s health-care needs that exceed $100 per year if the cost is not covered by insurance (for example, orthodontics, counselling, medication or eye care);
• expenses for post-secondary education;
• extraordinary expenses for your child’s primary education, secondary education or any other educational programs that meet your child’s particular needs; and
• extraordinary expenses for your child’s extracurricular activities.”

The special or extraordinary expenses are usually shared between the parents in proportion to their respective incomes.

For example, for a parent earning $80,000 and the other parent earning $60,000, the extraordinary expenses would be divided by adding the two incomes together and dividing the total by the parties income to get the proportional amount ($80,000 + $60,000 = $140,000 / $80,000 = 57% and $140,000/$60,000 = 43%).

What is the average child support payment for one child?

There is no average child support payment for one child as child support is dependent on the parties’ incomes and the parenting arrangement. The base amount of child support is found in the Federal Child Support Guidelines tables for British Columbia.  There is also extraordinary expenses that would be incurred on behalf of the child that would not be part of the base amount of child support, but would be divided by the parents in proportion to their respective incomes.

We, at M.J. O’Nions Lawyer & Mediator, have succeeded in making and obtaining many favourable applications for child support and parenting arrangements. Give us a call at 604-449-7779 or email us. We are here to help.

 

 

What percentages of marriage end in divorce in Canada?

Thinking about getting a divorce? You are not alone. According to the latest Statistics Canada data, approximately 38 per cent of all marriages end in divorce with the divorce rate peaking around 41% in the 1980s. While the total divorce rate has been steady, there has been a steady increase in the divorce rate for three-year marriages. The divorce rate tends to decrease as the length of the marriage increases.

How long does the average marriage last in Canada?

The average duration of marriages in Canada remains steady around 14 years with 42% of the divorces occurring for marriages lasting between 10 and 24 years.

What’s the most common age for divorce?

The average age of people at the time of divorce is 41.9 years of age for women and 44.5 years of age for men. The average age a person gets married is 27.6 years of age for women and 30.2 years of age for men. The average age at marriage and the average age at divorce have both increased slightly since 2006.

Which profession has the highest rate of divorce?

In Canada, there are no reliable statistics on the divorce rate by profession. However, data from the United States show that the professions with the highest divorce rates include dancers and choreographers, bartenders, gaming managers and service workers, and nurses.

How long do you have to be separated before divorce in Canada?

In Canada, under the Divorce Act, you have to be separated for one year to get a divorce. However, there are exceptions to this rule. These exceptions include if a spouse committed adultery, or if a spouse has treated the other spouse with physical or mental cruelty that renders the continued cohabitation of the spouses intolerable. 94% of all divorces in Canada use the separation of one year as the reason for divorce.

How much does divorce cost in Canada?

The cost of a divorce in Canada varies depending on the complexity of the divorce. If you and your spouse agree to a divorce, a party can file for divorce on an uncontested basis. To obtain an uncontested divorce, matters relating to parenting, support, and division of property must be resolved, usually by way of a Separation Agreement. According to the 2018 Canadian Lawyer’s Magazine Legal Fees survey, the national average for an uncontested divorce is around $1,600 and the cost of a contested divorce ranges from $7,500 to $12,500. If the divorce proceeds to trial, the costs could increase dramatically. These fees do not include disbursements which are out of pocket costs.

Should you require any advice on a separation or divorce, please give M.J. O’Nions Lawyer and Mediator a call at 604-449-7779. We would be honoured to help.

Before incorporating your business you may want to consider these seven legal tips.

1. Before deciding to incorporate your business, consider whether it is the best option or whether your business would benefit more from another legal structure such as a proprietorship or partnership. Please Read our blog on the Benefits of Incorporating a Business.
2. One of the considerations you will want to keep in mind when deciding whether to incorporate your business is income tax. Your business will be subject to different tax treatment depending on how it is structured. The tax treatment of corporations is often the biggest driver towards incorporation. Corporations often enjoy a lower tax rate then sole proprietorships. Other tax benefits to incorporating include tax deferral, income splitting, and the lifetime capital gains exemption on a sale of qualified small business corporation shares.
3. You have the option of incorporating your business in British Columbia, federally, or in another province. Think about where you plan to carry on business. If you plan to carry on business in more than one province, you may want to incorporate federally under the Canada Business Corporations Act (CBCA). Registering your corporate name federally allows you to carry on business under that name in any province.
4. Choose a unique name for your corporation. A company name must have a distinctive element, a descriptive element, and a corporate designation (i.e. “Limited”, “Limitée”, “Incorporated”, “Incorporee” or “Corporation” or the abbreviations “Ltd.”, “Ltée.”, “Inc.” or “Corp.”). Before registering your corporation, you must run a name search to make sure that name is not already in use. Note that this differs from a trade mark, which is a combination of letters, words, sounds or designs that distinguishes the company’s goods or services from others. A trade mark is registered separately from the corporation’s name and doing so will give you exclusive rights to use the trade mark throughout Canada for 15 years (a term that you can renew).
5. Who will be the director of your corporation and how many directors will there be? You should consult the governing legislation in your jurisdiction, as most place certain restrictions on who can act as director. For example, the CBCA requires that at minimum, 25% of the directors are residents of Canada. The British Columbia Business Corporation Act does not have a residency requirement.
6. While there is no requirement to execute a shareholders’ agreement when incorporating a business, you may find it beneficial to have one in place. A shareholders’ agreement is recommended where there are multiple shareholders involved in the financing and day-to-day management of the company. The agreement lays out the relationship between shareholders and can protect minority shareholders’ interests, while also protecting majority shareholders from oppression claims from minority shareholders.
7. Get familiar with the rights and obligations of your shareholders. They do not directly own the business or its assets, although their shares do give them certain rights with respect to the corporation, such as voting on resolutions. The nature of the shareholders’ rights will depend on the articles of the corporation and shareholders’ agreement, where there is one.

For a low flat fee, M.J. O’Nions, Lawyer & Mediator can incorporate your business for you and advise on how to structure your new corporation to keep costs and taxes at a minimum and prevent future disputes between shareholders. Please contact us at 604-449-7779 for assistance with incorporating your business.