Golden Girl Finance
Rachel E.R. Margolis
Posts (5)

Ask the Expert

Q&A: Rights & responsibilities as common-law couple

November 8th, 2010 by

My son and I have now been living with my boyfriend for over a year, so legally we're now common-law. We live in my house, and my name is the only one on the mortgage. What are our rights and responsibilities as a common-law couple? What should I be putting in place?

Asked by Anonymous, Halifax, NS


I am licensed to practice law in Manitoba, so my advice to you is based on Manitoba Law.

In Manitoba, you would only obtain common-law rights under The Family Maintenance Act (Manitoba) (the "Act") after either you and your partner have been cohabitating in a conjugal relationship for at least three years in the event that you do not parent a child together, or, one year in the case that you do parent a child together. "Parent" is defined under the Act to mean "a biological parent or adoptive parent of a child and includes a person declared to be the parent of a child under Part II."

In Nova Scotia, where you live, the relevant statute is the Maintenance and Custody Act. R.S., c. 160, s. 1; 2000, c. 29, s. 2 which defines "common-law partner" of an individual to mean another individual who has cohabited with the individual in a conjugal relationship for a period of at least two years.

I encourage you to seek the advice of a Nova Scotia lawyer as soon as possible, and in any event, prior to the second anniversary of the date on which you and your partner moved in together to protect your assets through a cohabitation agreement. Depending on your partner's assets, he too may want some protection and would be well advised to seek his own legal advice. In any event, he will need an independent lawyer to consider the proposed agreement put together by you and your lawyer.

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Q&A: Do I need a will if have no assets and only debt?

October 13th, 2010 by

Do I need a will if my husband and I have no assets and only tons of debt? I had a baby six months ago and would like to appoint a guardian for him, but do I need to do that in a will?

Asked by Anonymous, Toronto, ON


A properly drafted Will takes into account not only one's affairs at the present time, but also contemplates future acquisitions, dispositions and changes in one's circumstances.

Many people who do not have extensive assets still have personal property and sentimental objects which need to be dealt with either during their lifetime as a gift, or after their death via a Will.

With respect to guardians for minor children, although the appointment of a guardian in a Will is not authoritative and the Courts can disregard such an appointment if they determine an alternative choice is in the best interests of the child, guardianship clauses in Wills are extremely persuasive.

Other issues dealt with in a Will that are of comfort to many people are directions with respect to funeral arrangements and costs, as well as how gifts are to be paid or held in trust for minor beneficiaries.

It is my practice to recommend a Will to all my clients as well as Health Care Directives for decisions regarding medical care and Powers of Attorney to govern how one's property, in the event that one is unable to manage his/her affairs personally, is to be dealt with during one's lifetime.

It is prudent to review one's Will every few years to ensure it is up to date, as well as at such times as one's personal circumstances change - such as by marriage, divorce, or by the birth of a child, to name just a few.

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Q&A: What are Life Leases?

August 18th, 2010 by

We are contemplating downsizing. Could you please explain the option of Life Leases?

Asked by Anonymous, Gimli, MB


Life Leases are governed by The Life Leases Act (Manitoba) C.C.S.M. c. L130, which came into effect on December 1, 1999.

A Life Lease is a written tenancy agreement whereby an entrance fee and a monthly maintenance fee is paid in respect of a rental unit by a tenant (aged 55+) who is granted a right of occupancy for life or for a fixed period of time not less than 50 years.

Life Leases provide tenants with the opportunity for security as well as capital investment which often makes them more desirable than typical rental situations.

Additionally, in situations where the development is new, since Landlords will charge a lump sum entrance fee up front to cover construction costs, the monthly fees payable by the tenants are often greatly reduced, thus making these payments more manageable for tenants living on a fixed income.

Living in a Life Lease community provides many benefits to its residents in addition to the right to equity upon termination of the Life Lease Agreement. Whether an individual should enter into a Life Lease, however, ought to be carefully considered and both parties must clearly understand their rights and obligations. Certainly, before signing any agreement, it is recommended to seek the advice of a lawyer.

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Q&A: When should I incorporate my small business?

July 21st, 2010 by

At what point should I think about incorporating my small business and why?

Asked by Anna, Saskatoon, SK


There are many things to consider before deciding to incorporate your business. Generally speaking, the size of your business and the amount of money invested into it - and expected to be earned from it - will be the first of the considerations. Overall, the higher the net income of your small business, the more advantageous it will be for you to incorporate.

The most common benefits to incorporating are as follows:

  1. Separate Legal Entity

    A corporation is a separate legal entity that continues to exist unless wound-up or dissolved.

  2. Limited Liability

    Your liability as a shareholder of a corporation will usually be limited to the amount that you have invested in your shares in the corporation. This means that your personal assets are protected from lawsuits against the corporation. However, there a number of obligations and responsibilities of directors which must be considered.

  3. Tax Rates and Credits

    Canadian Controlled Private Corporations (CCPC's) pay a much lower rate of tax on active business income as a result of being able to benefit from the small business deduction. Another tax advantage of incorporation is the $750,000 capital gains deduction on the sale of shares of a qualifying small business corporation.

  4. Income Splitting

    A corporation can employ family members and family members can become shareholders to share profits. A corporation combined with a family trust is one of the most beneficial ways of sharing profits with family members and taking advantage of multiple capital gains exemptions.

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Q&A: What is a discretionary family trust?

July 15th, 2010 by

What is a discretionary family trust, what are its benefits and who needs one?

Asked by Kathryn, Toronto, ON


Discretionary family trusts are frequently used as estate planning tools. A trust is a relationship which is created when a person (called a "settlor") transfers property to one or more persons (called "trustees") for the benefit of other persons (called "beneficiaries"). The trustees become the legal owners of the trust property; however, they are under a fiduciary duty to administer the trust property in the best interests of the beneficiaries in accordance with a trust agreement, a document signed by both the settlor and the trustees.

There are two main benefits to establishing a discretionary family trust:

  1. The first benefit is that a taxpayer can transfer his or her future income and wealth to his or her family, many or all of whom may have lower tax rates, thus resulting in savings.
  2. The second major benefit is that the $750,000 capital gains exemption may be multiplied by the number of family members who are beneficiaries of the trust.

As well, a taxpayer may reduce the amount of taxes payable on his or her death since transferring assets to a discretionary family trust will reduce the size of the taxpayer's overall estate.

When a trust is defined as being "discretionary", it means that the trustees alone have the discretion to determine when and which beneficiaries are to receive either the income or the capital of the trust.

It is important to note that for tax purposes, a trust is deemed to dispose all of its property every 21 years. The reason for this is to ensure that a taxpayer cannot defer capital gains indefinitely by simply transferring property to a trust with an intention to never dispose of the property.