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LEGAL REPORT: FAMILY LAW The best of times or the worst of times to separate Division of assets is the crux of the matter when values differ greatly between when couples separate and when the divorce is finalized. BY KELLY HARRIS T he recession may mean it is the best of times or perhaps the worst of times for couples to separate, say family law lawyers in Ontario. Since 1986, the Ontario Family Law Act has said the time of valuation of marital assets is at the time of separation, not when a divorce is settled. Aside from support payments, the courts take a look at marital assets and then divide the dif- ference between the couple. When the economy is steady, housing prices are rising or constant, and invest- ment accounts are performing well, this distinction doesn't pose many prob- lems. But taking into account today's economy, housing prices dropping, and stock values plummeting, couples who split when times are good are finding their assets have little value at time of divorce. "The hot issue is, let's say you separated on June 1, 2007, the market was hot, you had $1 million in RRSPs and you had $500,000 in investment accounts, all fabulous," says Lorna Yates, a family law lawyer with Wilson Christen LLP in Toronto. "You had about $1.5 million in assets and your wife had $500,000 in assets, so the difference is $1 million, so there is $500,000 owing. We are now in January 2009 and your assets have tanked, because most of your assets are in RRSPs and investment accounts, so instead of the net worth of $1.5 million you had in June 2007, your net worth is only $500,000, and you owe your wife $500,000." So now isn't the best time to separate? Not exactly. If you separate at the bot- tom of the market then the division of assets is less, so it may be the best time for those who hold the assets. Of course if you are the spouse with assets of lesser value, now may be the worst possible time. "We have people coming in for advice who haven't separated yet and are thinking of separating and then I am telling people, 'look at your assets,'" Yates says in warning clients who do not have many assets to wait until the invest- ments go up. "If they have the assets, maybe, different advice." Either way the advice illustrates what other lawyers say about the consistency of family law. "Family law is not in tune with the economy," says James Herbert of Chappell Bushell Stewart LLP. "There is a steady flow of divorces regardless of the economy." One effect of the economic downturn on divorce may be the ability for a for- mer spouse to make support payments. Job loss for some or massive decreases in income for others all play roles in a former spouse's ability to keep up with www. C ANADIAN Law ye rmag.com M ARCH 2009 41 JASON SCHNEIDER