DivorceMate updates separation, and child, spousal support software
DivorceMate Software Inc. has updated its Precedents One program, which allows Ontario and British Columbia users to build separation agreements and marriage contracts, as well as its Tools One Program, which calculates child and spousal support for users across the country, says Michael Perlman, president of the Canadian legal software supplier for family law.
“The bulk of the changes were to the separation agreement software,” he tells AdvocateDaily.com. “Every year we try to update the separate agreement clauses to account for new case law or legislative changes that may affect the clauses in our agreements.”
The most significant changes related to child support and the tax clauses of the separation agreements, necessitated by the recent implementation of the Canada Child Benefit and subsequent repeal of the Universal Child Care Benefit and the Canada Child Tax Benefit.
“There is also the upcoming elimination of the federal education and textbook tax credits for post-secondary special expenses, effective January 2017,” Perlman says.
In addition, there were changes to the clauses respecting child support in shared-parenting cases.
“These clauses were amended to more closely conform to the requirements of Canadian Revenue Agency in allowing the allocation of the dependant credit to either party in a shared-parenting situation,” Perlman says.
“It would appear that so long as both parties agree, and both parties are required to make support payments for the children, the dependant credit can be allocated to the higher income parent. Notwithstanding this dual support obligation, for practical purposes, the parties will likely agree to set off the amounts so that only one cheque is necessary to satisfy both of their support obligations. It would be wise, however, to avoid any reference to a set off payment pursuant to a statutory scheme such as the federal Child Support Guidelines in the agreement, as this would appear to restrict the parties’ ability to allocate this credit.
"Ultimately, the CRA has the final decision on this credit, and counsel may want to ensure that they allow for a variation or review of the support obligations in the event that the CRA disallows this credit.”
Another important update to Precedents One relates to a legal decision handed down earlier this year.
“A caution was added to the clauses designating a spouse as an irrevocable beneficiary of a life insurance policy, in light of the recent case of Dagg v. Cameron Estate, 2016 CarswellOnt 4876,” says Christine Montgomery, legal consultant with DivorceMate.
“In this case, the Ontario Divisional Court held that despite the deceased’s designation of his first wife as the irrevocable beneficiary of his policy in a consent order, the proceeds were available to the second wife and child to satisfy their claims for support under the Succession Law Reform Act. In other words, an irrevocable designation may not be enough to protect the policy against another dependant’s claim under the SLRA.”
Leave to appeal this case to the Ontario Court of Appeal has been granted, but in the meantime, parties may need to make other arrangements to secure support, she says.
"Once the Court of Appeal has made its decision and the law becomes clearer on this issue, we will revise the irrevocable beneficiary clauses as necessary," she says.
The updates for Tools One (for all provinces) also include an adjustment to the net present value (NPV) rates.
“We have a part of our program that helps parties calculate a reasonable lump sum amount for spousal support, which is essentially a NPV calculation,” Perlman says. "The discount rates are updated quarterly based on the Government of Canada’s Real Return Bonds and Long-Term Benchmark Bonds."
Users will be prompted to update their software once they log on to their DivorceMate program, assuming they have set the automatic prompt to check for updates every 15 days. Alternately, they can access all updates by downloading the software directly from DivorceMate’s website through their customer number, Perlman says.