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High asset divorce in British Columbia must include all income

Definitions of income are outlined in tax laws to clearly establish status on which tax exemptions may be claimed. However, income as defined in the federal child support guidelines is what family law courts in British Columbia must base their decisions on. Accordingly, in a high asset divorce, all income must be disclosed in order for the court to make determinations about spousal or child support, and in particular, what the amounts of those payments should be.

It seems self-evident that nondisclosure, or even hiding, of income during or after the dissolution of marriage will, at some point, lead to legal mayhem. In a recent application for both child and spousal support, the judge called full disclosure as "the most basic obligation" in family law. In what reads like a cautionary tale, the ex-spouse claimed that his only income came from provincial disability payments, falling well below the threshold for child support.

Yet, he had assets and businesses placed in others' names, which allowed him a lifestyle of luxury. The court faced a dilemma since none of that income could be officially imputed to the husband. Moreover, even if such income could be attributed, the specific amount remained elusive. Ultimately, the court decided in the ex-wife's favour, referring to the husband's history of deception and misdirection, and lavish consumerism.

Frequently in such cases, the courts frown on the corollary effects of nondisclosure, such as the time, expense and frustration caused to the other party -- not to mention unduly extended court time. When better angels prevail, high asset divorce needn't be so cloak-and-dagger. A British Columbia family law lawyer, experienced in helping to expose encrypted assets, may be best able to assist a client attain full financial discovery.

Source: Financial Post, "In family court, there's no hiding the Ferrari", Laurie H. Pawlitza Special, Accessed on April 29, 2018

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