Planning to marry or thinking of cohabiting? The long-awaited new BC Family Law Act, which will be effective March 18, 2013, signals some major changes in how the courts in BC will view that relationship–and your assets– should that partnership come to an end. In a recent interview, Angela Thiele, head of LK Law’s Family Law group, shed some light on how the new law could change outcomes when partners decide to go their separate ways. The following is the interview with Angela.
Q: Overall, how important is this new Statute?
Angela Thiele: This is the most significant change to family law since the Family Relations Act came into force in the 1970s. The new Family Law Act completely replaces it.
Q: What’s the biggest change in the new act?
Angela Thiele: Several big changes leap right out at me, and a significant one focuses on the legal process itself. There is clearly much more of a focus on alternative dispute resolution and mediation in the new Act.
Also, the new Act changes the way that the law treats common law couples, and completely changes the way that property is divided at the end of a relationship.
Q: What about the splitting of assets–how does the new Act address that critical area?
Angela Thiele: First, the new law says that the assets you own at the beginning of a marriage or cohabitation can be determined to be yours alone, not family assets. Therefore it is crucial you identify and value these assets at the outset, and enter into an agreement to protect them–because you may have to prove 10 or 20 years from now that you had those assets prior to the relationship commencing.
Second, and just as significant, the new law will treat as spouses any partners who have a child or have been cohabiting for two years, even if they’re not married–which was not the case before.
So again, creating an agreement becomes more important than ever, even for existing relationships.
Q: What would such an agreement cover?
Angela Thiele: The purpose would be to say, “This asset is mine now, was mine when we came into this relationship, and will stay mine.” This will be true even if you use that asset for family purposes. But you must put a value on it as at the time of the agreement, because now the law will only require the split of assets or increases in values that were acquired during the relationship. The new Statute has much more specific language about the division of assets than the previous Statute, and that’s why it is so critical to address all these new provisions in an agreement.
Q: What happens now to assets when a cohabiting, but not married couple separates?
Angela Thiele: Under the old law, cohabitation agreements were not a good idea for the partner with the most money. Previously the partner with less money had to prove “contribution.” Due to an odd piece of legislation, having an agreement in the first place virtually constituted proof of contribution. In the new statute, that clause is gone. The partner with less no longer has to prove contribution and will be treated as a spouse. So under the new law, cohabitation agreements are now a necessity to protect an individual’s assets.
Q: How does the new law affect parental rights?
Angela Thiele: Parental rights have changed significantly. The words “custody” and “access” are gone. The word “guardianship” remains, but now has a different meaning and will be the sole term to describe responsibility for the children. Guardians will have a variety of “parental responsibilities” and time a child spends with a guardian will be “parenting time”. Time a non-guardian spends with a child will be “contact” rather than “access”.
An example of a significant difference under the new parental rights regime is the effect of your parental role on your ability to argue that your child could not be moved from this jurisdiction by the other parent. Under the new Act, any guardian who is proposing to move must provide formal notice to another guardian of that proposed move and the other guardian will have a chance to object to the move by filing a court application within a certain period. However, a “contact or access” parent has very limited rights to oppose the other parent moving their child. This can have a drastic effect on a parent who has never worried about a custody order for sole custody because they have had extensive parenting time with their child and did not worry about the wording of their year(s) old Court Order.
But as with everything else in the new Statute, this has yet to be interpreted by a judge–so it will be a while before we see stability in the new Act.
Q: The new Act also changes how the law deals with inheritances–can you elaborate?
Angela Thiele: The new statute says you no longer automatically have to share an inheritance with your spouse. It’s presumed to be yours. So this becomes an estate planning point for parents wanting to provide directly for their children, and an agreement should be written up immediately upon receipt, or before, of an inheritance you wish to protect.
And, previously, if you used an inheritance for a family purpose–for example, paying off a mortgage or contributing to an RRSP, you were conceding that it was a joint asset. Now, you can use that asset for a family purpose but still protect it as your individual property in the event of a marriage breakdown by drafting and signing a Marriage Agreement.
Q: What about the court process itself? Will the new Act make any difference in that regard?
Angela Thiele: There are some changes in the new Act to the process, and one of the biggest ones is a shift in focus to alternative dispute resolution as opposed to litigation. Currently, the court cannot impose mandatory mediation on separating couples, although it does encourage mediation and alternate dispute resolution. But in the new Statute, mandatory mediation is an option for the court in certain circumstances–an option they will almost certainly use. The courts are clogged with family law cases, so they need an alternative dispute resolution channel.
Also, recent changes to the Law and Equity Act mean that throughout British Columbia, one party to a family law matter can compel the other party to attempt mediation.
Of course, most family law lawyers already do all they can to avoid litigation, so mediation has been growing in popularity anyway. But now it can, in effect, be required by the court or an opposing party. It’s a big change.
Q: Is that a good thing for clients?
Angela Thiele: Yes, absolutely, because mediation is much less costly than a trial. I believe almost everyone could settle in mediation; only a tiny percentage of cases really need to go to court.
Even now, we use court mediation, where a judge serves as a mediator. It’s a good option, because a judge’s opinion is obviously much more persuasive than a mediator’s. But with limits to judicial availability, the role of mediators is growing.
Q: So, in broad terms, does the new act change the need for legal representation for people with family law issues?
Angela Thiele: My key message is, before the Statute changes or on the eve of it changing, you should get some advice if you are thinking of marrying or cohabiting, or are only a few years into that relationship–or expecting an inheritance. I think marriage and cohabitation agreements are now much more important.
With our resources here in family law and estate litigation and estate planning, LK Law already does very strong agreements and we will definitely continue to do more.
Creating a marriage or cohabitation agreement is a prudent and cost-effective step that provides clarity and peace of mind for couples–and will save them immeasurable grief and expense. I know this from the thousands of agreements I have prepared myself. With the new Family Law Act, I think we’ll be doing a lot more of them now.
Q: And will LK Law now be expanding mediation services to its clients?
Angela Thiele: We have offered mediation services for a long time; and personally, I am a trained mediator. But, yes, with the new law, I expect we’ll be doing more mediation–and perhaps less litigating.
A partner, litigator and mediator with Lindsay Kenney LLP, Angela Thiele heads up LK Law’s Family Law practice group, as well as handling employment, real estate and insurance matters in a varied practice. In her family law work, Angela addresses complex divorce issues, property division, protecting business interests, custody and access disputes, tax implications upon marriage breakdown and support payments. She helps to guide the work of LK Law’s other divorce lawyers, child custody lawyers, and family law lawyers in Vancouver and Langley.