The Ontario guidelines for child support are the same as the
Federal Child Support Guidelines. In Ontario, an order for child
support can be made under the Family Law
Act if the parents are separated or were never
married. Such an order can also be made under the federal
Divorce Act. In either case, the same
guidelines apply. The courts have also applied the same principles
for the purpose of calculating spousal support.
A spouse's income is based on line 150 ("Total
Income") of his or her T1 general return. However, under
section 19 of the Federal Child Support Guidelines, a court may
impute income to the spouse " as it considers appropriate in
the circumstances." Nine circumstances are listed in which
income imputation may be appropriate. Because these circumstances
are intended merely as examples, the court retains discretion to
impute income in other circumstances as well. One listed
circumstance involves a situation in which a spouse is a
beneficiary under a trust and is or will be in receipt of income or
other benefits from the trust. The case of a gift is not included
among the nine listed circumstances.
Recent Ontario cases have confirmed the court's discretion
to include gifts in the calculation of income for support purposes.
Such an inclusion of gifts derives from the 2007 Ontario Court of
Appeal's decision in Bak v. Dobell,
2007 ONCA 304. The court enumerated the following factors that are
to be considered in determining whether it is appropriate to
include gifts in income: ( 1) the regularity of the gifts, (2) the
duration of their receipt, (3) whether the gifts were part of the
family's income during cohabitation that entrenched a
particular lifestyle, (4) any circumstances that mark the gifts as
being unusual, (5) whether the gifts did more than provide a basic
standard of living, (6) the income generated by the gifts in
proportion to the payer's income, (7) whether the gifts were
made to support an adult child through a period of crisis, (8)
whether the gifts are likely to continue, and (9) the true nature
and purpose of the gifts.
Horowitz v. Nightingale, 2015 ONSC
190, was a motion for temporary child support in which
Bak v. Dobell was applied. The amount of
$50,000 was imputed to a husband's income for the purpose of
calculating child and spousal support. The husband had been
receiving a gift in this amount from his parents in each of the
preceding eight years. The court concluded that the funds were
treated as part of the family's income and supported the
family's lifestyle. The annual gift amounted to approximately
25 percent of the husband's business income for the year. The
court simply stated that it was "safe to conclude" that
the gifts would continue without further elaboration.
Bak v. Dobell was also applied by the
Ontario Court of Appeal in Korman v.
Korman, 2015 ONCA 578. An amount was imputed to the
husband's income on the basis of "neither irregular nor
infrequent" gifts received from his parents. The court found
that there was a settled pattern of parental gifts to finance
private school tuition or camp expenses for the children, to assist
the husband in maintaining the family's lifestyle, or to
underwrite the husband's various business ventures. The amount
of the gifts appeared to approximate the husband's annual
employment income in each of the three years preceding trial.
Although the husband had objected to the imputation on the basis
that it shifted the onus of providing support to his mother (who
had no legal obligation to provide support to either the wife or
the children), the Court of Appeal rejected this argument. It held
that the trial judge had made a finding about the husband's
likely source of revenues and noted that the husband could apply
for an adjustment to any support order if the situation changed in
In Ontario, estate planning is sometimes focused on a gift after
marriage because such a gift and the income that flows from it is
excluded from net family property under section 4(2) of the
Family Law Act. As a result, the gift is not subject to
equalization in the event of a marital breakdown. A parent
implementing an estate freeze might take steps to ensure that the
common shares of a corporation (in a corporate estate freeze) or
the growth units of a partnership (in a partnership estate freeze)
pass to a married child by way of gift. While this may protect the
property from an equalization claim, parents should also be advised
that monetary gifts to a married child may ultimately factor into a
support claim in the event of a marital breakdown.
Originally published by Step Inside, January 2016.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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