MacLean Law is one of British Columbia’s largest and most experienced group of Vancouver Double Dipping Spousal Support lawyers. Our Vancouver Double Dipping Spousal Support act out of 4 offices across British Columbia located in Vancouver, South Surrey, Kelowna and Fort St John. We are also opening a Calgary office June 1, 2016. You can meet with founder Lorne N. MacLean, QC who specializes in the grey divorce field and who understands the complexities of income and wealth distribution later in life. We’ll help your golden years remain untarnished by financial worries. Contact us now to get the help you need to resolve matters when financial security is at a premium. Call us toll free at 1-877-602-9900.
Post-Retirement Spousal Support and Pension Division / Double-Recovery Lawyers
Vancouver Double Dipping Spousal Support deal with the issue of what happens when an asset that one party was bought out of produces income. A family business is one example and pensions are another. So what are the rules to prevent someone who thought they had a pension income stream protected so all of the income goes to themselves faces a spousal support demand after the pension stream begins?
Vancouver Double Dipping Spousal Support lawyers provide the following summary of a recent BC Court of Appeal case that dealt with a retired Supreme Court Justice’s pension.
In simple terms a Vancouver Double Dipping Spousal Support pension double-recovery and Spousal Support family law disputes arise when it is unclear how to fairly determine spousal support after a pension has been divided between spouses. MacLean Law’s Pension Division and Spousal Support Lawyers frequently handle cases involving pension division and spousal support. We are multiple winners of Vancouver’s Top Choice Award for Family Law and lead by one of BC’s top lawyers. You can meet with us with full confidence that we will accurately assess your case and prepare a powerful argument to maximize your chances of success. Our toll-free number is 1-877-602-9900. We have offices in Vancouver, St. John, Kelowna and Surrey.
Our Vancouver Double Dipping Spousal Support Explain WHAT IS DOUBLE RECOVERY?
Our Vancouver Double Dipping Spousal Support lawyers tell our clients that Family property accrues to both Spouses. Generally, this property is to be divided between spouses evenly, and some of this property is held in the form of pensions. Pensions are tricky though, as they are both a form of property and (later, when they start to be paid out) a source of income. The problem occurs when spousal support is due, and the ex-spouse paying the support is retired – at that point, some of the money being used to pay support may come from family property (the pension) which was already divided.
Vancouver Double Dipping Spousal Support lawyers reviewed a recent BC high court decision in the recent case of Parrett v Parrett, 2016 BCCA 151 [Parrett], a case decided before British Columbia’s highest Family Law court, the foundation of pension double-recovery was explained this way:
[33] I begin with the principle of double recovery as discussed in Boston. That case also involved a long traditional marriage in which the wife had been responsible for raising the couple’s children. The husband held a pensionable job in the civil service. In 1994, the spouses had consented to a judgment dividing their assets under which the husband received approximately $385,000, most of which was attributable to the value of his pension. The wife received the matrimonial home and various other assets amounting to approximately $370,000. Mr. Boston agreed to pay her $3,200 per month, indexed to the cost of living. At that time he had been earning approximately $115,000 while Ms. Boston had no income from employment. Later the husband retired and was living on pension income of $8,000 per month. Major J., speaking for the majority of the Supreme Court of Canada, stated:
The husband’s Ontario Teacher’s pension had two components. The larger portion of the pension, $5,300 per month, came from the asset he retained on equalization of the matrimonial assets and, according to the husband, should not be considered in assessing spousal support. The second component of the pension, $2,300 per month, was earned since separation and was not part of the equalization of assets. The husband’s submission was that, considering the earlier division of assets, the wife had an obligation to contribute to her own support and only the unequalized portion of his pension should be considered when determining support on a change in circumstances. [At para. 18; emphasis added.]
Double-Recovery of Pensions Allowed in Certain Circumstances
[36] Major J., speaking for the majority, began his analysis by noting a recent trend in the case law to avoid ‘double dipping’. He cited in particular Shadbolt v. Shadbolt (1997) 32 R.F.L. (4th) 253 (Ont. Gen. Div.) and an annotation thereon by Professor McLeod. Major J. observed that there is no reason why spousal support cannot continue after the retirement of a pension-holding spouse, but that several factors must be considered in making such a decision in a particular case. One of those factors, he stated, is the extent, if any, of double recovery. He continued:
How is double recovery fairly avoided? (See Shadbolt, supra, per Czutrin J., at para. 46.) It is generally unfair to allow the payee spouse to reap the benefit of the pension both as an asset and then again as a source of income. This is particularly true where the payee spouse receives capital assets which she then retains to grow her estate. The comments of Walker, supra, at p. 233, bear echoing:
It is well-recognized that a borrower should not be compelled to continue monthly loan payments to the lender if the borrower has previously paid the full amount owing. “Double dipping” is analogous to such a situation and is logically and mathematically indefensible.
To avoid double recovery, the court should, where practicable, focus on that portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing need for support is shown (see Hutchison, supra, at para. 9). In this appeal, that would include the portion of the pension that was earned following the date of separation and not included in the equalization of net family property.
Despite these general rules, double recovery cannot always be avoided. In certain circumstances, a pension which has previously been equalized can also be viewed as a maintenance asset. Double recovery may be permitted where the payor spouse has the ability to pay, where the payee spouse has made a reasonable effort to use the equalized assets in an income-producing way and, despite this, an economic hardship from the marriage or its breakdown persists. Double recovery may also be permitted in spousal support orders/agreements based mainly on need as opposed to compensation, which is not the case in this appeal. [At paras. 63-5; emphasis by underlining added.]
[37] The majority concluded that it would be “inequitable” to allow the wife to reap the benefit of the pension first on the division of assets and again as a source of income. As stated by Major J.:
The wife received capital assets on equalization which she is saving and accumulating presumably for her beneficiaries. By contrast, the husband’s only tangible asset, his pension, is diminishing.
The motions judge concluded that the wife still had a need for support and the husband still had an ability to pay, and focused on that portion of the husband’s income that had not been the subject of division with the wife in the past. I agree with her conclusion that the un-equalized portion of the husband’s pension was a principal consideration in the support to be paid. [At paras. 75-6; emphasis added.]
Vancouver Double Dipping Spousal Support
Our Vancouver Double Dipping Spousal Support and Pension Division and Spousal Support lawyers handle hundreds of cases involving division of assets, pensions, and spousal support. Our Pension Division and Spousal Support lawyers act for those who are retired or near retirement, are divorced, and who have fallen on hard times, or who may be at risk of their spouse seeking to vary their prior arrangements.
In Parrett, the wife had already received 50% of the husband’s pension at is was valued for their entire marriage from February 16, 1990 to the date of their separation on February 28, 2000. HOWEVER, the court in Parrett found, at para 41, that:
“Annuity benefits accruing thereafter were not affected. This being the case, the rule against double recovery is not violated by considering that portion of the husband’s annuity attributable to the period beginning March 1, 2000 and ending on retirement in 2015 in order to determine his income for support purposes.
In sum, the court in Parrett:
- Found that spousal support was due to the wife, based largely on her medical needs (or so-called needs-based entitlement);
- Reduced the husband’s income by $20,900 for the purposes of spousal support calculation (the amount the husband’s pension had been reduced due to property division; and
- Imputed a pension / post-retirement income of $30,000 to the wife.
Our top-rated Spousal Support and Asset Protection / Wealth Preservation lawyers are here to help you make sure that you are protected post-retirement.
Call us toll free across BC at 1-877-602-9900 across BC to meet with our highly experienced lawyers in Vancouver, Kelowna, Surrey and Fort St John, BC, led by one of the Province’s most successful and storied family lawyers, Lorne MacLean, QC (Queen’s Counsel).
