Planning to Live TogetherJune 24, 2009
Canada’s Court System – The Federal Court SystemAugust 24, 2009
When a couple in Medicine Hat separates and is able to come to an agreement about how to spend time with their children and what to do with their property, they often attend at a lawyer’s office together to just finalize their divorce. They are regularly surprised to discover that the lawyer cannot act for both of them, and that the lawyer recommends they should have a contract prepared to finalize the agreement between them.
The Code of Professional Conduct of the Law Society of Alberta does not allow a lawyer to act for two people who have opposing legal rights. Because it is in the interests of both the husband and wife to maximize the property they receive as a result of the breakdown of the marriage, they are considered to be adverse in interest. As a result, a single lawyer is unable to represent both the husband and the wife. In fact, the husband and wife cannot be represented by two lawyers in the same firm. The Matrimonial Property Act, which governs the division of property between married parties, requires that each person obtain independent legal advice in order to enter into a legally enforceable contract. If they do not have independent legal advice, any agreement they sign will not be enforceable.
The Alberta Matrimonial Property Act also says that a spouse or former spouse can begin an action for the division of matrimonial property up until two years after the divorce is final. Therefore, in order to protect both parties from the possibility that the other party changes their mind about the property division, or decides that they need more property, it is very important that they enter into a legally binding agreement that divides their property. This prevents both the husband and the wife from bringing a claim if they become dissatisfied with the property division.
The lawyer has a duty to determine that the client understands what property they have, what property their spouse has and what property the client is entitled to share. The lawyer must also ensure that both parties have told each other about everything they earn, everything they own, and everything they owe. In order to do this, the lawyer cannot simply believe whatshe or he is told. It is up to the lawyer to see the documents that prove these three things. The lawyer is required to review the following types of documents:
- pay stubs and income tax returns;
- bank and investment statements;
- appraisals for houses, cars and jewelry;
- mortgage, credit card and loan statements;
as well as any other documents which answer these three questions.
If one party or the other is claiming that there are assets they are not required to share with the other party, the lawyer must also see the documents that prove that the property is not shareable. The lawyer must also see the financial documents for any corporation owned by either party. If the lawyer has not seen all of these documents, she or he has not fulfilled his duty to her or his client, and the lawyer is at risk to be reported to the Law Society or sued for failing to protect her or his client.
Dividing property upon separation of couples is a complicated process. Even when people agree, each person requires the advice of their own lawyer and the lawyer has steps she or he must take in order to protect each person’s rights.