Our communities are completely unaware of the fact that as of March 18, 2013, common law partners will be treated the same as married partners, if they break up.  And that means:  50% of the family property and 50% of the family debt to each of you!  Read on...you can choose to opt out if you want to...









Who Gets What When?

Division of Property on Breakup of a Marriage or Common Law Relationship under the Family Law Act

The Family Law Act comes into force in B.C. on March 18, 2013.  This pamphlet talks about what your situation will be if you break up after March 18, 2013.

(If you broke up before March 18, 2013, the old law, the Family Relations Act, applies to your situation).

Who Does the Law Apply To?

The Family Law Act applies to all married couples; and it applies to unmarried couples who have lived together for two years or more.  It applies to heterosexual couples, same sex couples, and couples with one or two trans members.

Who Does the Law Not Apply To?

Any couple can contract out of the Family Law Act.  That means that the two of you can create your own agreement about how finances will work during your relationship, and how you will divide property if the relationship ends.  So, reading through the rest of this pamphlet, bear in mind that if you don’t like the way the law would apply to your situation, you can create your own contract.  Then the Family Law Act does not apply.

When Does the Law Kick In?

The law takes effect as soon as the two of you separate.

Who Gets What if We Break Up?

At the moment of separation, each spouse is entitled to a half interest in all “family property”, and is responsible for one half of “family debt”.  It doesn’t matter who contributed what to the purchase of the property, or whose name the property or the debt is in.

So what counts as “family property” and “family debt”?

A thumbnail:  what you owned, or what you owed, before you got together, is yours.  But whatever property, and whatever debt, either of you acquired after you got together, is divided between you 50/50.  Certain types of property are excluded.

Now for the details (and the devil is always in the details).

The way the Family Law Act sets it up, unless there is a specific exemption, family property is all real property (real estate) and personal property (money and things) owned by at least one spouse or in which at least one spouse has a beneficial interest on the date of separation.  We’ll get to the exemptions in a minute.

The Family Law Act specifies some things which definitely are “family property”, including:

• a share or an interest in a corporation;
• an interest in a partnership, an association, an organization, a business or a venture;
• property owing to a spouse:
• as a refund, including an income tax refund, or
• in return for the provision of a good or service;
• money of a spouse in an account with a financial institution;
• a spouse’s entitlement under an annuity, a pension, a retirement savings plan or an income plan;
• property, (other than  certain trust property), that a spouse disposes of after the relationship between the spouses began, but over which the spouse retains authority, to be exercised alone or with another person, to require its return or to direct its use or further disposition in any way;
• the amount by which the value of excluded property has increased since the later of the date:
• the relationship between the spouses began, or
• the excluded property was acquired.

 
So what is NOT family property?

The Family Law Act sets out a list of what is not family property:

• property acquired by a spouse before the relationship between the spouses began;
• gifts or inheritances to a spouse;
• a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for:
• loss to both spouses, or
• lost income of a spouse;
• money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for:
• loss to both spouses, or
• lost income of a spouse;
• property referred to above that is held in trust for the benefit of a spouse;
• property held in a discretionary trust:
• to which the spouse did not contribute;
• of which the spouse is a beneficiary; and
• that is settled by a person other than the spouse;
• property derived from property or the disposition of property referred to above.

Since property acquired before the relationship began belongs to that spouse, whereas the same property purchased by that spouse after the relationship began can be divided 50/50, it will be important – and sometimes difficult – to know when the relationship began and what the value of the property was at that time.

The onus is on you if you want to argue that a particular property is not a family property. 

Some Examples, Please?

What about a business that I bought before the relationship, and operated as a sole proprietor during the relationship?  The business was worth $100,000 when we married ten years ago.  Now it is worth $150,000: 

         Because you bought the business before the relationship began, the first          $100,000 is yours.  But the $50,000 increase in value is a family property and will be divided 50/50.  As the owning partner you would get $100,000 + $25,000 = $125,000; your spouse would get $25,000.

An investment I owned before we got together and have never used during the relationship:

        Not a family property.  But if it earns income, the income is a family property and is divided 50/50.

Property one spouse bought and paid for during the relationship :

        Family Property

I’m a doctor.  When we got together I had $38,000 in student loans. I racked up another $20,000 in student loans for the first two years we were married.  Then I established a family practice, which is incorporated:  the name of my company is Dr. Nolan Finefeather Ltd.  I take a draw from the corporation which is the source of my income.

       Your professional corporation is a family property since you set it up after you got together.

You are responsible for the first $38,000 of the debt; but the balance is divided 50/50. 

Property bought with equal contributions from both spouses, after getting together, but in the name of one partner:

        Family property

Property bought with unequal contributions – say 90/10 – and put in joint names after the relationship began:

       Family property

Disability insurance policy:

       Disability insurance from work may be a family property.

Property owned in both names:
        
        The important thing is not whose name it is in, but when it was purchased.  If it was bought before the relationship began, then each owns the original value of their contribution; but the increase in value after the relationship began is divided 50/50.
       
Property one of us bought before we got together:

         Not family property; but any increase in value after you got together is family property.

I owned a cottage before we got together.  It was worth $150,000 when I bought it, and $200,000 when the relationship started.  I sold it for $300,000 two years after the relationship began, and bought another property for $300,000:

         The new cottage continues to be your separate property and is not subject to 50/50 division even though it was bought after the relationship began, because the property was bought in substitution for an excluded property.

Property one of us bought before we got together, sold, and bought another property:
        
Home we live in:

            There are no special rules for the family home.

            Who bought it?  Before or after the relationship began?  If before, it is excluded, but the increase in value will be shared.

                Note that it may not be possible to divide the family home if it is located on a First Nations reserve.  Talk to a lawyer.

Family Debt

Here’s how the Family Law Act deals with debt:
          
                    Family debt includes all financial obligations incurred by a spouse:

                    (a)  during the period beginning when the relationship between the                                 spouses begins and ending when the spouses separate, and

                     (b) after the date of separation, if incurred for the purpose of                            maintaining  family property.

When you separate, each of you is responsible for one half of the family debt.  And you continue to be responsible for one half of the debt (a mortgage for example) after separation, if the purpose of the debt is to maintain a family property.

So:  take note!  You can be held 50% responsible for debt – credit card debt, for example, - that you knew nothing about. 

Can a Judge Make a Different Division than 50/50?

Yes, but only in very limited circumstances.  Before a judge can intervene, the law says that it must be “significantly unfair” to divide it equally.  This is a very strict test and we can expect that a court will not often divide family property other than 50/50.

If you ask the judge to make a different division than 50/50, the factors a judge can take into account in making that decision include:

• how long you have been together;
•  the terms of any agreement you have made between you
• a spouse’s contribution to the career or career potential of the other spouse;
• whether family debt was incurred in the normal course of the relationship between the spouses;
• if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt;
• whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;
• the fact that a spouse, other than a spouse acting in good faith:
• substantially reduced the value of family property, or
• disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse’s interest in the property or family property to be defeated or adversely affected;
• a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;
• any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.

In addition to those factors, a court can also consider the extent to which the financial means and earning capacity of  a spouse have been affected by the responsibilities and other circumstances of the relationship between the parties.

Even though the calculation of the 50/50 share is only on those properties which are family property, and not excluded property, a judge can order that excluded property be divided between the parties in some circumstances, for example where a family property or debt located outside B.C. cannot be divided; or if it would be unfair not to divide the excluded property given how long the couple was together and what contributions each of them made to the preservation, maintenance, improvement, operation or management of the excluded property.

The Take-Home Messages

1.         Opt Out

The Family Law Act is an “opt-out” regime.

If you don’t like the idea of having the property you acquire during the relationship being divided 50/50 when you break up, or you don’t like the idea of being responsible for 50% of the debt of someone whose spending habits are far different than yours, then…write an agreement.   You are allowed to create an agreement that says that you will NOT be bound by the rules in the Family Law Act, and you can specify exactly who will get what if you separate.  If you have such an agreement, it takes precedence over the Family Law Act rules.

If you do not have such an agreement, you will have to take it as it lays under the Family Law Act, if you ever separate.

2.         Keep Records

If you break up, you may find yourself having to establish the value of a property you acquired before the relationship began, as of the date the relationship began.  Don’t throw out any financial records, no matter how old (in fact, especially if they are old).

                                                          _______________

This article contains legal information.  It is not legal advice.  For advice about your specific situation, consult barbara findlay QC or another lawyer.

  Current to March 18, 2013

© barbara findlay QC
635-1033 Davie Street
Vancouver, British Columbia V6E 1M7
T 604 251-4356
F 604 251-4373
E bjf@barbarafindlay.com
W www.barbarafindlay.com
Feel free to reproduce this booklet provided that you credit the author, include this information block, and do not charge for it.

 

CHOOSING CHILDREN:  March 2013

Queer families who want to have children may adopt a child, or they may choose to have a child by birth.

This pamphlet describes the options if you want to conceive a child, and how the law applies.

A single person can have a child by birth, and if they do, the explanations in this pamphlet will apply.

A lesbian couple will need sperm.  A gay couple will need both eggs and a surrogate mother who will gestate and give birth to the child.  A couple in which one intended parent is transgender may or may not require sperm, eggs, or a surrogate.

All of these ways of conceiving a child are referred to as “assisted reproduction”.  If a child is conceived with assisted reproduction, who are the child’s legal parents?  Do queer parents have to get an adoption order, or an order declaring them to be a parent, to be sure that their legal connection to their child cannot be challenged?  Suppose a queer couple want to include an egg or sperm donor as one of the child’s parents?  Can you have more than two legal parents?

The Family Law Act

For the first time in B.C., the law answers all these questions.  After March 18, 2013,

• Donors of sperm and eggs are NEVER  ‘parents’ of a child conceived with their genetic material, except if
• Both parents in a lesbian, gay or trans-headed family are entitled to register as the child’s legal parents when the child is born, without the need for a “stepparent adoption” or a court order declaring them as parents
• If a queer couple has agreed with a surrogate mother to carry their child, the couple (and not the surrogate) can registered as the child’s legal parents when their child is born
• you do not have to have a genetic connection to a child in order to be registered as a legal parent of a child when the child is born
• it is possible to register more than two people as a child’s legal parents when the child is born, provided that the intended parents have agreed in writing before the child is conceived

These are very big changes.  Before the Family Law Act, a birth parent, and a co-parent who was not genetically connected to a child, could be registered with the Vital Statistics Registry, and get a birth certificate showing both of them to be “parents” of their child.  But that didn’t make the non-genetic coparent a child’s legal parent.  For that to happen, a stepparent adoption or a court order declaring the non-genetic parent to be a child’s legal parent was required.  If a surrogate mother carried a child for a queer couple, both intended parents needed a court order, even if one of them had donated sperm or eggs to enable the conception of the child.

And it was not possible for a child to have more than two legal parents.

Why the Emphasis on “Legal” Parents?

There can be many ‘parents’ in a child’s life: the parents she had at birth, and the, if her parents broke up, partners they got together with could become stepparents.  Those partners acquired responsibilities as the child’s stepparent.  But they never become a legal parent of a child.

A child’s legal parent is the person under the law from whom a child would inherit.  Who your legal parents are determines who your relatives are, and determines such issues as who you can marry without being guilty of incest. 

We will examine the situation of lesbian co-parents, gay co-parents, and families with a transgender co-parent.

Remember that a single parent can also become a parent.

Lesbian Co-Parents

Sperm Donation Only

A lesbian couple who want to have a child together will need a sperm donation.  They can either buy sperm from a fertility clinic, or they can use sperm donated by someone they know.  If they buy sperm, they can register both lesbian moms on the child’s birth certificate when the child is born.  And that makes them the child’s legal parents, without any further steps being necessary.  No expensive adoption or declaration of parentage is required. 

The same is true if they use sperm from a known donor - with two important cautions. 

The co-moms must have been in a relationship when the child was conceived. 

And it matters how the child is conceived.  If a donor gives sperm to an intended mom, and she uses the “turkey baster method” to inseminate, both moms can register as their child’s legal parents at birth.  But if the bio-mom skips the turkey baster and has sex with the donor, then he and the bio=mom are deemed to be the child’s legal parents.  In that case the lesbian co-mom will need an adoption order or a declaration of parentage to confirm that she, and not the sperm donor who had sex with the birth mom, is the child’s second parent.

The law specifically says that a sperm donor does not get any rights or responsibilities as a legal parent just by donating sperm.  So no donor insemination agreement is necessary

Egg Donation /Surrogacy

Even if neither of the lesbian co-moms is able to conceive, or carry, a child, the two co-moms can be registered as the child’s legal parents at birth.  In that case, they will need in addition to sperm a donation of eggs and a surrogate mother.

What Does it Cost?

If they need a surrogate mother, and the child will be conceived with donated sperm and the eggs of the surrogate, they may work with a fertility agency, or the surrogate may be inseminated through the turkey baster method. 

It is illegal to pay for eggs, or sperm. It is also illegal to pay a surrogate a fee for carrying your child, though you can pay the surrogate’s expenses.  The law is unclear about what expenses are permitted to be reimbursed.  You will want to be clear with the surrogate mother what things will be paid for.  If your surrogate is a resident of B.C., she will be able to rely on B.C. Medicare to pay for the cost of delivering the child.

If you use the services of a fertility agency, there is of course a charge. 

Making sure you are the legal parents of a child born to a surrogate

If you are a lesbian couple who are planning to have a child with sperm from a donor, and eggs from a woman who will carry the child, what steps do you need to take to make sure you are the two legal parents of the child who is born?

As we said,  you don’t need a donor insemination agreement.

But you do need a written surrogacy agreement, signed between the lesbian co-moms and the surrogate before the child is conceived. And the surrogate will also have to sign a consent to surrender the child, when the child is born. 

Because the surrogacy agreement has to comply with the Family Law Act to enable you to rely on it to register as the child’s legal parents without needing a court order or an adoption, it is wise to get legal advice before drafting the agreement.

Once the child is born, if your paperwork is in order, you can register both of you as the child’s legal parents, with the Vital Statistics Agency.  At that point, you are your child’s only legal parents.  Neither the sperm donor, nor the surrogate /egg donor, has any parental rights.

What if you didn’t know about the need for a pre-conception surrogacy agreement, or your paper work does not comply with the requirements of the Family Law Act?  In that case, the Vital Statistics Agency will not register you as the parents of your child.  You will need to get a court order declaring you to be the parents of the child.  For that you will need the help of a lawyer.

Gay Dads

If you are a gay couple wanting to have children, you will need to have an egg donor, and a surrogate mother.  They may be the same person.

As outlined above, you can pay a surrogate mother for her expenses, but you cannot pay her a fee; and ou cannot pay for a donation of eggs.

You may use a fertility clinic to assist with the insemination.  If you are using an egg donor who is different from the surrogate mother, you will have to use the services of a fertility clinic, because they will have to do an extraction of the eggs.  An embryo will be created “in vitro” (outside the womb) and implanted in the surrogate mother.

If your egg donor and the surrogate mother are the same person, you need to have a surrogacy agreement, signed before the child is conceived; and when your baby is born your surrogate mother will have to sign a consent and give the baby to you.  See above for a description of the surrogacy agreement.

With that paperwork in hand, you and your partner can register as your child’s legal parents at the birth of your child.  You are then the child’s only legal parents, for all purposes of the law.

If for some reason your paperwork is not in order, you will need to make an application for a “declaration of parentage”. You will need legal help to do that.

Transgender Families

A couple may include one or two transgender individuals.  A trans person is someone whose sense of their own gender is not congruent with the other gender indicators such as their primary or secondary sex characteristics, or their chromosomal or hormonal makeup. 

For trans people whose situation is acute, medical treatment involves sex reassignment surgery (SRS) and hormone treatments.  An individual changes their body so that it is congruent with their own sense of their gender.

A male to female trans person who has SRS will have her testes removed, and her penis inverted to create a vagina; and she will have breast augmentation.  She will take feminizing hormones. 

A female to male trans person will have chest contouring, along with masculinizing hormones.   He may hsave a hysterectomy and a surgically-constructed penis.

So how does a trans person prepare for parentage?  First, he or she can plan ahead, by freezing sperm or eggs to be used to conceive a child, down the road.  In that case, the trans person is using their own genetic material, for their own parental project, so they are, under the law, one of the child’s legal parents.

In some cases, a transman may be able to give birth to a child.  If he has not had a hysterectomy, he may conceive and/or carry a child.  He will discontinue masculinizing hormones to do so.  In that situation the transman will be registered as the child’s “birth mother’ because the law defines “birth mother” as the person from whose body a child was delivered.  But the child’s birth certificate will show him as “parent”.

Multiple Parents

A big change in the law in B.C. is that a child can now have more than two legal parents.  Provided that all of the prospective parents agree in writing, before a child is conceived, a donor of sperm or eggs, a surrogate mother, and perhaps the partners of those individuals, may also be registered as a legal parent of the child.  Then the child’s birth certificate will show whichever of those people has a agreed to be a co-parent as a legal parent on the child’s birth certificate.

Because it is important that the agreements satisfy the requirements of the Family Law Act in order that all the child’s prospective parents can be registered on the child’ birth certificate without the need for a court order, it is wise to get legal advice before creating the agreement among the parents. 

B irth Certificates

All of a child’s parents are listed on his birth certificate, and all of them have the word ‘parent’, regardless of how many parents a child has.  The words ‘mother’ or ‘father’ do not appear any longer on birth certificates in British Columbia.

*This pamphlet is effective March 13, 2013.  It is available for downloading on the Out/Law page of this website, and may be used without charge provided that barbara findlay is credited as the author, no changes to the text are made, and no fee is charged for the material.

The Ministry of Social Services and Housing has, alas, cottoned on to the fact that two people of the same gender living in one apartment may be common law partners.
The serious downside is that the Ministry takes into account your "partner's" income and may disentitle you to social assistance benefits in that situation.
That's what happened to Mr. Street, who lived with another man in Vanderhoof. He was actually charged with fraud, because, according to the Crown, he had lied when he said that he was not living with anyone.  The judge dismissed the charge, noting that he had responded to a question "Marital status - single, never married" appropriately since at the time same sex partners could not marry.  The judge went on to find that though the two men were living together, the evidence did not establish a common law relationship, even if the two were "buddies with benefits" as the court put it, during that time.  R. v. Street 2012 BCJ #2356 November 15, 2012

According to Julia A. MacMillan, professor of pediatrics and associate dean for graduate medical education at the Johns Hopkins University School of Medicine, every study ever done over the last 30 years confirms that children are healthiest if raised by two loving parents, regardless of gender.

In an article in today's Baltimore Sun, MacMillan notes  "Every major children's health and welfare organization, including the American Academy of Pediatrics, the Child Welfare League of America, the American Psychological Association, the American Psychiatric Association, the National Association of Social Workers, and the American Academy of Child and Adolescent Psychiatry, confirms that gay parents make good parents. The American Medical Association, the nation's largest and most well respected association of physicians, with a membership of more than 200,000, agrees".  Studies purporting to show that LBG parents are flawed have been completely debunked for their pseudo-scientific methodologies. 

There is currently no research specifically about trans parents. 

The law governing rights and responsibilities of BC couples will be changed dramatically.  Shirley Bond announced today that the Family Law Act, which has been passed by the Legislature but had not been 'proclaimed' (come into force) will be effective March 2013.

Would you share your property 50/50 if you broke up?
The Family Law Act will transform the law applying to couples and families in BC.  One of the biggest changes is that common law couples (those who have lived together for more than two years, but are not married) will now have the same property rights that married people have.   If they separate, each person will be entitled to 50% of the family property - something that till now has not been the case.  In addition, each person will be responsible for 50% of the family debt - even credit card debts in the name of only one of them!

The only way for queer couples NOT to be liable to divide their family property if they break up will be to have a cohabitation, or marriage agreement. This is the opt-out choice if you don't like the property regime under the Family Law Act.  I have always recommended cohabitation agreements:  it is the way for partners to decide what is right for them, rather than relying on the default provisions of the law.  While many people find it 'unromantic' to talk about such things at the beginning of a relationship, it is guaranteed to be much harder to do if the relationship ends!  (There is an Out/Law guide for people thinking about a cohabitation agreement:  "Living Together - Some Questions to Consider")

Good news for same sex parents who conceive with known donors
A positive development for same sex parents is that sperm or egg donors will have no legal rights or responsibilities with respect to the child. This is hugely important for children  conceived with assisted reproduction, and their parents.  It removes any possibility that a sperm donor might change his mind and sue for custody or access.

It will continue to be necessary for the non-biological parent to adopt the child her or his partner is biologically related to.  Though both same sex parents can be named on a child's birth certificate, that is only 'evidence' but not 'proof' of a child's parentage. 

In a separation, the only consideration in deciding about the future ofa  child will be the best interests of the child.  It remains to be seen how that will be interpreted.  And there are new mechanisms to enforce agreements or orders about when each parent spends time with a child.

Other changes
The Family Law Act has a new emphasis on ways to resolve family issues without going to court, including mediation, parenting coordination, or arbitration.  This is a welcome development since court always increases bitterness between the parties, which is especially harmful if there are children.

There are also new provisions to address violence in the home.

What about you?
Changes in the law WILL apply to relationships already begun.  So, if you are in a relationship of more than two years, the law that applies if you break up will be different than it was when you entered the relationship.  Be proactive:  make your own decisions about what you want the financial aspects of your relationship to be, both while you are together, and if you separate.  Otherwise you will find yourself in a situation you didn't plan for and don't want, with a judge making decisions instead of you.