Calgary Family Divorce lawyers know getting divorced is the easy part of a breakup but the financial settlement is much more complex. Hiring Lorne N. MacLean, QC the founder of MacLean Law’s Calgary family divorce lawyers makes sense to ensure complex Calgary matrimonial property and debt division occurs fairly and efficiently. Our Calgary Family Divorce lawyers can be reached in downtown Calgary at 403-444-5503.
Calgary Family Divorce Lawyers 403-444-5503
MacLean Law’s Calgary Family Divorce lawyers handle complex matrimonial and exempt property division cases. Our Calgary Family Divorce lawyers understand division of family businesses and corporate matrimonial property assets and matrimonial debts involves valuations, analyzing what each category matrimonial property is worth, (a matrimonial home worth $1,000,000 is worth more than a company worth $1,000,000 after tax) and deciding what is the most tax efficient and fairest way to divide the matrimonial property.
Sometimes a settlement involves an equalization or compensation payment sometimes it involves a division of the asset itself called an “in-specie” division. Tax consequences are often missed by non specialist lawyers and this omission can be financially fatal.
In DBF v BF, 2016 ABQB 484 a Court of Queen’s Bench decision, the court provided a snapshot of how matrimonial property division works, assessed how a division could occur and found cash payment for company shares was not feasible so it divided lucrative company shares equally between the husband and wife by way of a corporate reorganization called a “butterfly transaction. These reorganizations create a new company for the wife and a tax free transfer of shares. This method ensures each spouse pays their fair share of taxes on a company asset that often will have latent costs of commissions, capital gains tax and distributive taxes. Here are the good parts of the decision:
Calgary Family Divorce Lawyers Explain Matrimonial Property Division
[392] The MPA, in particular sections 7 and 8, governs the distribution of matrimonial property. Matrimonial property is property acquired by the spouses during the marriage. The MPA exempts some property acquired during the marriage from distribution, but there is no such property at issue in this case.
[393] The statutory presumption is for equal division of matrimonial property. The Alberta Court of Appeal in Jensen v Jensen, 2009 ABCA 272 (CanLII) affirmed the strength of the presumption of equal distribution (at para 20):
…The presumption of equal distribution is the rule and unequal distribution the exception. The legislation is designed to protect against inequities arising from dissolution of marriage and to recognize a social and economic partnership. The respective contributions of the parties will rarely be identical or measure equally. Partners allocate expectations and responsibilities in a manner satisfactory to them. Those responsibilities may change and evolve over time. Put simply, it is not a requirement (nor is it a realistic view of marriage) that the contributions of each party be equal for there to be equal division. …
[394] The court can order an unequal distribution of non-exempt matrimonial property if, after considering the factors in section 8, it concludes that it would be unjust or inequitable to divide it equally. I find that there is no reason to deviate from the presumed equal division in this case.
[395] In Hodgson v Hodgson, 2005 ABCA 13 (CanLII) (at para 2), the Court of Appeal confirmed that the proper date for the valuation is the date of trial. Thus, the date for valuation of the parties’ divisible matrimonial property is the date of trial.
Calgary Family Divorce Lawyers In Specie Division
[409] I have considered the cost associated with Mr. F paying cash to compensate Ms. F for her one-half interest in the BPI Shares owned by Pera. I accept Mr. F’s argument that the value of the BPI Shares held by Pera are far in excess of the funds available to either party to purchase the other’s interest. A cash payout would create a financial hardship for Mr. F, particularly since the liquidity of the BPI Shares is uncertain.
[410] In these circumstances, I find it fair and just that Ms. F receive an equal share of the same in specie matrimonial asset that Mr. F will retain, which is one-half of the BPI Shares owned by Pera. In this way, Ms. F, like Mr. F, will share equally in the upside or the downside of their ownership interest in BPI, with Ms. F receiving the same benefits or detriments that Mr. F receives from their investment as shareholders in BPI.
[411] Mr. F will immediately cause the transfer of one-half, or 33,140 BPI Shares, held by Pera to Ms. F in the most tax-effective way possible, including, if appropriate, by way of a butterfly transaction. The parties shall share equally the costs for the transfer of the BPI Shares to Ms. F.
High Net Worth Calgary Family Divorce Lawyers
When significant matrimonial property exists and it involves a mix of company, partnership, and professional entities as well as investments and real estate you need seasoned High Net Worth Calgary Family Divorce Lawyers on your side.
