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Court could order billionaire to share assets

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On behalf of Laughlin & Company Lawyers Mediators posted in Division of Property on Sunday, March 30, 2014.

The billionaire owner with a controlling interest in Continental Resources Inc., an oil company, could find the appreciation of his stock classified as a marital asset in a case that family lawyers in British Columbia are watching with interest. Although the stock itself was obtained prior to his marriage and is not counted as a marital asset, an Oklahoma judge reported that he was waiting to make a decision on the increased value of 125 million stock shares.

The 69-year-old billionaire was relieved that the preliminary ruling gave him the right to keep the stocks in the divorce. However, they could require him to divide the earned income from the stocks, which could be billions of dollars. His lawyer did not comment on the case. Bloomberg listed the man in the top 50 of richest people in the world.

The couple were married for 26 years when they submitted divorce paperwork in 2012. They did not have a pre- or post-marital agreement. One lawyer commented on the stocks in the case and the court’s decision. He explained that Oklahoma law will look at if either party contributed to the growth of the asset instead of allowing market conditions to increase its value. He added that the involvement could mean the court decides that the stocks are a marital asset and need to be shared by both parties. The stocks were originally sold for $15 in 2007 but are now worth $120.46, which was an increase of more than $13 billion.

During a divorce, the division of assets can be challenging and stressful for both parties. A family lawyer might be able to help clients who are seeking a fair division of assets with an equitable divorce settlement.

Source: Bloomberg, “Continental Resources Founder’s Stake at Risk in Divorce“, Brendan Coffey, March 19, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Trust and Settlement Variation Act

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By Laughlin & Company Lawyers Mediators of Laughlin & Company Lawyers Mediators posted in Trusts on Thursday, March 27, 2014.

If you are the beneficiary of a trust and are facing a long waiting period to receive your inheritance, this may be of interest to you.

Trusts are a common device to provide a secure stream of income for another person, usually family members.  This is done by creating a trust with a specific purpose (e.g. my grandson’s education) or through a will.  Pension funds are also trusts and are subject to variation under the Pension Benefits Standards Act.

The trustee of the fund created may periodically make payments directly to the beneficiary or to a guardian should the beneficiary be under 19 years of age or disabled.  But the main body of the fund is held by the trustee.

Trusts are often created to endure for a very long period of time.  Often the beneficiary would prefer to have the money now rather than at some point in the distant future.  This is especially so with investment returns currently being so low.  There are situations where it is beneficial for all concerned that the terms be varied or the trust be collapsed completely.

The courts many years ago established a rule (Saunders v. Vautier) that if a beneficiary is an adult and there are no contingent beneficiaries, then the beneficiary can ask that the trust be collapsed and the money paid to him or her.  A contingent beneficiary is a person or entity who would inherit the remainder of the fund should the beneficiary die before the remainder of the fund vests in the primary beneficiary.

However, most trust terms provide for designated contingent beneficiaries and that avoids the rule in Saunders v. Vautier.  This does not mean that the trust cannot still be varied.  That is the purpose of the Trust and Settlement Variation Act, to vary trusts when it is of benefit to all parties.  The contingent beneficiaries can be protected by providing them with a sum certain of money up front, or payable at a later date, or providing insurance on the beneficiary’s life to protect them in the event of the beneficiary’s death.

There are many possible solutions for a beneficiary who feels disadvantaged by having to wait for his full inheritance.  If you are such a beneficiary, you may wish to investigate your alternatives.

For more information about trusts, contact Norman Einarsson
Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370

Study shows children benefit from equal parenting time

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On behalf of Laughlin & Company Lawyers Mediators posted in Child Custody on Friday, March 21, 2014.

A 2013 study with implications for parents in British Columbia and across Canada found that children of divorced parents have the best outcome when they can spend equal time with both parents. The study shows that shared parenting usually works to minimize abuse and contention between parents even when the parents disagree. A parent who has minimal time with a child generally seems to have reduced input into a child’s life. Even a Supreme Court judge referred to the parent with less time as an ‘interested bystander.”

Even when the courts order shared parenting, one parent will usually spend minimal time with a child. A parent who does not have equal access to the child could struggle to obtain even simple information, such as what is happening with the child’s education, address or health. The parent with primary custody could make decisions about the child without the second parent’s perspective. Parenting provisions might not always be administered properly.

Generally, courts enforce a standard visitation schedule that gives a non-custodial parent time with the child only four to six days per month. The child’s needs are usually not considered, and custody is often routinely ordered to one parent, usually the mother. One benefit to joint custody is that parents are free to work out better scheduling options, even if they are not equal parenting schedules. Some parents are backing a new bill in Parliament in order to encourage shared parenting practices.

When a marriage between parents ends, what to do about child custody and parenting time can be one of the most challenging issues to resolve. A family lawyer might be able to work out a schedule that favors a fair distribution of custody time so that both parents can have an adequate amount of time with their child.

Source: The Toronto Star, “Bill favoring ‘equal time’ for parents in divorce deserves support“, Glenn Cheriton, March 19, 2014

Laughlin & Company Lawyers Mediators
2755 Lougheed Hwy #710, Port Coquitlam, BC V3B 5Y9
(604) 945-4370