Financial Gifts from Family Can Increase your Support Obligations
The Superior Court of Justice dealt with an interesting case. It is called Teitler v Dale, 2017 ONSC 248 (CanLII). You can read it here.
In this case the Father Payor owned a business. His income fluctuated every year. The Wife was a homemaker. The parties lived a millionaire’s lifestyle because the Father’s parents gifted a great deal of money throughout the marriage.
The Father’s parents still gifted a great deal of money to the Husband after the separation. The yearly income was $275 000.00 but the yearly expenses are $551,417.88.
The Mother wanted the judge to consider these gifts to be part of the Father’s regular income. If successful, the Father would have to pay more child and spousal support.
The Honourable Justice Harvison Young disbelieved many of the Father’s submissions. First, the judge criticized the Father for failing to provide required financial disclosure.
The judge disbelieved the Father’s claim that the Father’s parents were now unwilling to pay future gifts. If the Father truly believed this threat than he would have changed his lifestyle.
The judge also disbelieved the Father’s claim that the money was loans. The Father’s income is too small for anyone to reasonably expect repayment and, indeed, the Father did not may any payments to his parents.
The judge reviewed the case law regarding whether gifts should be reclassified as regular income. The factors are as follows:
- the regularity of the gifts;
- the duration of their receipt;
- whether the gifts were part of the family’s income during cohabitation that entrenched a particular lifestyle;
- the circumstances of the gifts that earmark them as exceptional;
- whether the gifts do more than provide a basic standard of living; the income generated by the gifts in proportion to the payor’s entire income;
- whether they are paid to support an adult child through a crisis or period of disability;
- whether the gifts are likely to continue;
- and the true purpose and nature of the gifts.
Given the circumstances of the case, the Father’s annual income was imputed to be $1 200 000.