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Canada's legalization of Cannabis Use: How will it affect family law?

Canada’s Legalization of Cannabis Use: How Will it Affect Family Law?

Canada’s new Cannabis laws came into force October 17th, 2018, and it is important that persons who choose to consume the drug be aware of what the new laws allow (for a summary of some of the new laws see http://www.justice.gc.ca/eng/cj-jp/cannabis/).

Failure to properly understand the laws and what is permitted regarding possession, distribution, and consumption could cause complications not only for criminal reasons, but potentially family law reasons as well.  These complications could affect some family law issues such as:

  1. Custody and Access
  2. Residency
  3. Mobility

What does The Cannabis Act allow?

Individuals can now legally do the following:

  • possess up to 30 grams of legal cannabis, dried or equivalent in non-dried form in public
  • share up to 30 grams of legal cannabis with other adults
  • buy dried or fresh cannabis and cannabis oil from a provincially-licensed retailer
    • in provinces and territories without a regulated retail framework, individuals are able to purchase cannabis online from federally-licensed producers
  • grow, from licensed seed or seedlings, up to 4 cannabis plants per residence for personal use
  • make cannabis products, such as food and drinks, at home as long as organic solvents are not used to create concentrated products

It is important to note that cannabis must be supplied from a legal source as described above.  Any illicitly acquired cannabis is not protected by the act and may result in penalties.  Furthermore, although edible products can be produced at home, they are not legal for sale for approximately one more year.

Youth and Cannabis

One of the purposes of The Cannabis Act (the “Act”) is to protect the youth from accessing cannabis.  As the Act provides, “No person may sell or provide cannabis to any person under the age of 18”.  This means that individuals cannot give or sell cannabis to youth, or use a youth to commit a cannabis-related offence.

Travel and Cannabis

Cannabis is still illegal in most of the United States.  Crossing the border without properly understanding these laws could create significant issues.  Also, each province is responsible for developing their own regulations regarding Cannabis such as:

  • increasing the minimum age in their province or territory (but not lowering it)
  • lowering the personal possession limit in their jurisdiction
  • creating additional rules for growing cannabis at home, such as lowering the number of plants per residence
  • restricting where adults can consume cannabis, such as in public or in vehicles

Pardons for Simple Pot Convictions

Now that individuals are allowed to possess up to 30 grams of legal Cannabis, Ottawa is moving to pardon those with a pot possession conviction of 30 grams or less (https://globalnews.ca/news/4558996/cannabis-pardons-simple-possession/).  However, those seeking the pardon will have to apply for one.

How might this affect Family Law?

Some questions that may be tested in the future regarding these new laws could include:

  1. Should a parent be allowed to exercise access visits at their home if they fall within the allowed possession or consumption laws? Would this be contrary to the purpose of the Cannabis Act to protect the youth?
  2. What happens if a parent owns illicit cannabis that was shared improperly between adults and contrary to the new laws? Would a judge factor this into any parenting arrangements?
  3. If a person had their parenting arrangements affected by a pot possession conviction, how could that change if their possession conviction is then pardoned?
  4. What if a parent tries to take the child across the border to the US or another province, but is found with legal marijuana in their possession? Would this be factored in negatively by a judge at any family law court proceedings?

Case law will be developed over time regarding Cannabis consumption and possession and how it can affect Family law issues.  We will be keeping an eye on how these and other issues will be interpreted by courts to ensure that we can provide you with up to date information on the issue.

 

Disclaimer: The above is for informational purposes only and does not serve as legal advice. Please speak to your lawyer to better assess your specific situation.

Working with an Estate Planning Lawyer

You’ve finally decided that you are ready to put together an estate plan (preparation of wills, trusts, and power of attorneys etc.) but are not sure about what the process will involve.

Here’s a quick list of some items that you should be prepared for:

Get specific about your assets

  • There’s no estate plan without discussing financials. All assets need to be considered and reviewed along with designations which may need to be changed, updated, or revised. These include not only your home, investments, shares, or bank accounts but also things like life insurance policies, registered plans etc. Not giving these items attention could lead to problems.

Get clear on what you want

  • Who should inherit your assets after you pass away?
  • Who should be looking after your affairs (funeral, debts, taxes, administration and distribution).
  • Who is the best suited to look after your minor or dependent children?
  • Should you consider an insurance trust agreement in order to provide further protection?
  • Are certain life-interest trusts or spousal trusts (possibly in a second-marriage scenario) required to further protect what you’ve earned and to ensure that not only is your spouse is protected during his or her lifetime but the capital of the trust is reserved for other persons?

Get the right opinion

  • You likely have some thoughts on your plan and who it should benefit but aren’t sure about the right way of bringing them to life. The best way to sort out is to speak to a professional (lawyer, financial advisor, and accountant) with a focus in this area. An opinion from a qualified professional is invaluable in making the decisions that suit your needs and protect your assets.

Get writing

  • Generally, the first step is for you to fill out a questionnaire to provide personal information in order for us to be able to assess your needs and tailor the plan accordingly.

The above is only a general idea of what is involved. Feel free to call us to get the process underway.

Disclaimer: The above is for informational purposes only and does not serve as legal advice. Please speak to your lawyer to better assess your specific situation and estate planning needs.

Net Family Property and Equalization: An Introduction

Equalization is a payment from one spouse to the other at the end of a marriage.  This equalization payment ONLY applies to married spouses, not to common law spouses.  S. 5(1) of the Family Law Act (“FLA“) provides for Equalization when:

  1. A divorce is granted;
  2. Marriage is declared a nullity;
  3. When (married) spouses are separated and there is no reasonable prospect they will resume cohabitation.

One thing I often hear clients ask is whether they have to split 50% of everything.  While somewhat true, it is not entirely accurate.  The real definition of division according to s. 5(1) of the FLA is as follows: “the spouse whose net family property is the lesser of the two net family properties is entitled to a one-half difference between them”.

In simpler terms, separated spouses are entitled to 50% of the value of the marriage.  So how is that value determined?

 

Marriage and Valuation Date

First we need to understand what Net Family Property (“NFP”) is and how to calculate it.  S. 4(1) of the Family Law Act defines NFP as all property that a spouse owns on the valuation date (i.e. separation date) after deducting:

  1. Debts and other liabilities; and
  2. Value of property OTHER THAN A MATRIMONIAL HOME owned on date of marriage.

Therefore we have two dates that are important in determining equalization:

  1. The valuation date; and
  2. The date of marriage.

The date of marriage is simply the date you got married and does not include any cohabitation before marriage.  Spousal support may factor in cohabitation periods before marriage however.  See our post on spousal support for more info by clicking here.

The Valuation date is essentially the date the marriage ended, or the date the parties separated.  It is defined under s. 4(1) of the FLA as:

  1. The date you separate;
  2. Date the divorce is granted;
  3. Date marriage is a nullity;
  4. Date one of the spouses commences an application based on improvident depletion that is subsequently granted; or
  5. Date before the date on which one of the spouses dies leaving the other spouse surviving.

Once we have those two dates, we can begin figuring out how much your Net Family Property (“NFP”) is.

 

Calculating Net Family Property for Equalization

When determining the Net Family Property (“NFP”) of persons who are ending their marriage, we need to look at two important dates: the marriage date and the valuation date.

Let’s pick two dates to help figure out the NFP:

  1. Jane and John married on October 1, 2010;
  2. Separated on February 1, 2018.

That’s almost 8 years of marriage.  You’ll see here that February 1, 2018 is the date of separation, which fits under the definition of Valuation date in s. 4(1) of the FLA.

Now, we take the value of all assets that both parties own on the valuation date, subtract their debts owned at valuation, and finally subtract the value of any property owned on the marriage date.

JOHN

John’s Assets on Valuation Date Car – $25,000

Personal Bank Account – $3,000

$4,000 in Joint account with Jane (50%) – $2,000

Investment Account ending in 1010 – $170,000

 Total = $200,000

John’s Debts on Valuation Date Loan from Friend – $50,000

Total = $50,000

Property Owned at Marriage Investment Account ending in 1010 – $100,000

Total = $100,000

Calculate Final Total

Assets

– Debts

– Property at marriage

 

$200,000

-$50,000

-$100,000

John’s NFP $50,000 

JANE

Jane’s Assets on Valuation Date Car – $20,000

Personal Bank Account – $2,000

$4,000 in Joint account with John (50%) – $2,000

RRSP – $6,000

Matrimonial Home – $320,000

Total = $350,000

Jane’s Debts on Valuation Date Line of Credit – $50,000

Mortgage – $100,000

Total = $150,000

Property Owned at Marriage Matrimonial Home – $220,000

Total = $220,000

Calculate final total:

Assets

– Debts

– Property at marriage

 

$350,000

-$150,000

can’t subtract Mat Home

Jane’s NFP $200,000 

So, something interesting happened here.  Jane’s name is the only one on title to the home and it was valued at $220,000 when they got married.  She should be able to deduct that home from the valuation date value right?

Wrong.

Remember, you subtract property owned at the date of marriage from your valuation date EXCEPT for the matrimonial home.  So Jane has to include the entire value of the home regardless of how much it was worth at marriage.

We’re almost there.  The language of the equalization rule is: “the spouse whose net family property is the lesser of the two net family properties is entitled to a one-half difference between them.”

 

EQUALIZATION

Jane’s NFP

– John’s NFP

$200,000

-$50,000

$150,000
Difference divided by 2 $150,000/2
Equalization Payment or, the one half difference $75,000

In this instance John, who is the lesser of the two net family properties, is entitled to the one half difference between them, $75,000.

Therefore Jane makes an equalization payment of $75,000 to John.  With that, John would have $125,000 and Jane would have $125,000.  They are equalized.

 

Additional Exclusions

You also have the ability to exclude other property on the valuation date other than just debts under S. 4(2) of the Family Law Act.

These include things such as:

  • Property acquired by gift or inheritance after marriage date
  • Income from property that was gifted or inherited if donor EXPRESSLY stated it is to be excluded from NFP
  • Damages from a settlement resulting from personal injuries, nervous shock, mental distress, or loss of guidance care and companionship
  • Proceeds or right to proceeds of life insurance policy payable on death of insured
  • Property OTHER THAN MATRIMONIAL HOME into which property above can be traced
  • Property both spouses agree not to include as a result of a domestic contract (see our post on separation agreements for more info)
  • Unadjusted pensionable earnings under Canada Pension Plan

If you’re thinking of separating and want help to ensure you are properly protected, contact Rabideau Law to see how we may assist.

Child Custody and Access Introduction

One of the most significant concerns for parents, if not THE most significant concern, on separation is what will happen with the children.  Where will the child live? Who is going to make decisions for the child regarding their education, religion, or medical care? How much time will each partner spend with the children?

These questions are related to custody and access and this post will focus on those issues alone.  Child support issues are covered in our previous post here.

There are two different statutes dealing with custody and access in Ontario: the Divorce Act for married spouses, and the Children’s Law Reform Act (“CLRA”) for non-married and married spouses (see our post on married vs. Common law spouses for details on the difference between both types of relationships).

But what is the difference between custody and access? Are they not the same thing?

The person who is responsible for the child on a daily basis and makes daily decisions for the child is said to have custody of the child.  This can include decisions on things like: education, religion, and health care.  It does NOT automatically mean which parent the child will live with, although generally the person with sole custody is the parent with whom the child resides.

Access on the other hand is the ability to visit and ask for information regarding the child’s health, education, religion and general welfare.

When making a decision regarding custody and access, the courts will consider the “Best interests of the Child”, see s. 24(2) of the CLRA.  These include:

(a) the love, affection and emotional ties between the child and,

(i) each person, including a parent or grandparent, entitled to or claiming custody of or access to the child,

(ii) other members of the child’s family who reside with the child, and

(iii) persons involved in the child’s care and upbringing;

(b) the child’s views and preferences, if they can reasonably be ascertained;

(c) the length of time the child has lived in a stable home environment;

(d) the ability and willingness of each person applying for custody of the child to provide the child with guidance and education, the necessaries of life and any special needs of the child;

(e) the plan proposed by each person applying for custody of or access to the child for the child’s care and upbringing;

(f) the permanence and stability of the family unit with which it is proposed that the child will live;

(g) the ability of each person applying for custody of or access to the child to act as a parent; and

(h) any familial relationship between the child and each person who is a party to the application.

With these two terms defined and a background on the best interests of the child, we can approach what types of custody and access there are.

 

Custody

S.20(1)  of the CLRA provides that both parents have equal entitlement to custody of the children. However this entitlement is limited by s.20(4) of the CLRA.  What this means is that if the child resides with one spouse and you decide to move out, you could effectively be giving away custody rights to your child.  However you do not lose access rights.

Parenting decisions post separation can be approached in multiple ways.  These can include the following:

Joint Custody
With this, both parents must agree on major decisions regarding the child.  This arrangement requires that both parents co-operate well together to ensure the children are raised well and it works best when both parents have the same values and ideals on how to raise the children.  The parents may even choose to divide the decision making responsibilities.  For example, one parent may take the responsibility regarding education decisions while the other makes decisions regarding health care.

Sole Custody
One parent makes all the important decisions regarding the child.  They may have to communicate with the other parent about the decisions, but ultimately the parent with sole custody does not need the consent of the other parent.  Usually, if there is sole custody the other parent has access.

Split Custody
Each parent has sole custody of one or more children.  This is a rare solution for custody as courts generally do not like to separate siblings.  This type of custody is usually provided where the children are older and can express their opinions about which parent they want to live with.  With that, if the court determines that this opinion of the child should be given considerable weight, they may then grant split custody.

Shared Custody
This term is usually confused with joint custody.  This type of custody is actually an access arrangement and does not indicate which parent has legal decision making power, although custody arrangements can be included here (which helps contribute to the confusion).  You can have shared custody whether or not you have joint custody.  With shared custody, both parents have the child for at least 40% of the time.  Essentially, the child’s time is split evenly between the parents.  This type of arrangement can also impact how much child support is to be paid (see child support post for more details).

Access

Under the s. 20(5) of the CLRA parents are entitled to visit and be visited by the child.  This also includes the right to make inquiries and be given information about the child’s health, education, and welfare.

Types of access include the following.

Reasonable Access – sometimes called liberal or generous
If parents are able to co-operate, then access can be left open and flexible.  This type of access is heavily customizable as both parents simply communicate and negotiate access on an on-going basis as they see fit.

Fixed or specified Access
This will include a detailed access schedule with dates and times for access to be exercised.  This can cover things such as: holidays, long weekends, birthdays and so on.  You can also identify where access will take place and who will pick up and drop off the children.

Supervised Access
This may be required if one of the parents demonstrates the following behaviour:

  1. Substance Abuse;
  2. Domestic Violence;
  3. Parental Alienation.

The person supervising the access can be a relative, friend, social worker, worker at a supervised access centre, or even a Children’s Aid worker.  This kind of access is generally only done on a temporary basis.  If it’s determined that the visits are benefiting the child and the parents respect the terms of the access orders, the access can progress to unsupervised access and can also gradually increase over time.

No Access
This is an extreme result where a parent might not be able to access the child at all.  An order for no access can result where there is serious neglect of the child, abuse, or if the child’s safety cannot be protected even if supervised.

Other custody and access issues

A parent cannot refuse access to the other parent unless there is a court order to that effect.  If a parent does refuse access to another without proper justification, that parent may be found in contempt of court.  If that behaviour continues, the parent refusing access could suffer serious ramifications.

Child support and access are two different things.  A parent cannot be denied access if support is not paid, and support would likely still need to be paid even if there is no access.  It is also possible for a non-parent to be given custody or access, but this must be determined in accordance with the Best Interests of the Child.

Parents have the ability to outline their desires in a Parenting Plan which can be included in a separation agreement.  See our post on separation agreements to learn more.

Common Law vs. Marriage

Common Law and Marriage are often confused when it comes to the division of property and other rights and obligations upon separation. In order to know what you’re entitled to, it’s important to understand the distinction between these two terms so you can create the best plan for your future.

What may be confusing to some is the fact that the Family Law Act (“FLA”) has two definitions for spouse and that these two types of spouses are treated very differently upon separation.

Definition of Spouse in Ontario

Keep note that the definition of spouse and the rights that flow from that definition differ from province to province. This post is restricted to the definition of spouses and their rights in Ontario.

The first type of spouse is defined in s. 1(1) of the FLA and it means either of two persons who:

  1. Are married to each other, or
  2. Have together entered into a marriage that is voidable or void and in good faith

This includes marriages from anywhere else in the world.

The second type of spouse is found in s. 29 of the FLA.

Here, spouse means any spouse as defined in s. 1(1) (the married spouses) AND anyone that meets the following criteria:

Persons who are NOT married to each and have cohabited:

  1. Continuously for a period of not less than three years; or
  2. In a relationship of some permanence, if they are the parents of a child.

What is also important here is the part that says “cohabited continuously.” Consider the following example for a couple with no children:

  • Partners live together for 2 years starting January 1, 2015;
  • They then live apart for 7 months from January 1, 2017 to August 1, 2017;
  • Then they start living together for 5 more months starting August 2, 2017.
Start of cohabitation – 2 years Break in cohabitation – 7 months Restart of cohabitation – 5 months End of three years
January 1, 2015 January 1, 2017 to August 1, 2017 August 2, 2017 January 1, 2018

 

In this example, they would not meet the criteria of common law spouse as defined in the FLA.  They would have to live together for 3 more uninterrupted years from August 2, 2017 to August 1, 2020 to be considered common law spouses.

However, if this couple had children, then they would likely be considered common law.

How do these separate definitions of spouse affect me?

These two definitions mean that there are different property rights for a married spouse and a common law spouse. Under the FLA, married spouses have automatic property rights in addition to support rights.  This means they have rights to an equalization payment, property such as the pension, the matrimonial home, support payments, and intestacy rights.

Common law spouses on the other hand, only have automatic rights to spousal support on separation under s. 29 of the FLA. This comes as a shock to some clients as they believe that simply living in the home is enough to guarantee rights to the home or any other shared property. This is only true in common law where both parties share property as joint tenants or tenants in common.

However, spousal support is not guaranteed like child support is. Spousal support is granted according to various factors, one of which is need (see s. 30 of the FLA).

Now that doesn’t mean a common law spouse can never claim rights to property out of the common law relationship and succeed; it just means they will have to seek one of the following alternative remedies;

  1. Unjust Enrichment;
  2. Quantum Meruit;
  3. Constructive trust; or
  4. Resulting trust.

These types of remedies are called “equitable claims” and usually involve litigating the matter in court in order to successfully receive the remedy.

Contact Rabideau Law’s caring and experienced staff for a consultation to see what legal options are available in your specific situation.