Often family members work together in a family business. If a parent wishes to pass the family business or family farm to his or her child, or possibly arrange an estate freeze such that the growth in the business will accrue to the child, legal advice should be obtained beforehand, not only to determine how best to do it and the tax implications, but also to discuss the family law implications in the event that the son or daughter subsequently separates from his or her spouse or marries in the future. Will the child's spouse have any claim to the value of the business or farm? This becomes even more significant if the child's matrimonial home is located on the farm property or on the business premises. Questions to consider include whether the child ought to have a marriage contract in place before any transfer of shares or assets takes place.

If a parent wishes to assist a child financially, perhaps to purchase a business or to financially assist the child's business during a difficult time, it is again important to seek legal advice first. If money is simply given to the child and the child subsequently separates from his or her spouse, the parent may be equally benefitting both his child and his son/daughter-in-law, which may not have been the parent's intention. It may be preferable from a family law perspective to lend the money to the child, either with no interest payable or at a low rate of interest.

If in fact money is lent to family members as opposed to an outright gift, it is essential that the loan be documented, either by way of a promissory note and/or preferably secured by way of a mortgage, and it is essential that a record be kept of payments made. If, as is often the case with families, a loan is made informally with no legal documentation maintained, it will be very difficult to prove that the monies advanced were a loan as opposed to a gift, should the child's matrimonial matter with his or her spouse result in litigation. In such a case, it may be that the child's spouse will claim that the money was a gift, and if this is accepted by the Court, the son-in-law may obtain the benefit of one-half of the value of the loan, a result not contemplated or intended by the parent.

Second marriages (or third or fourth marriages for that matter) should also cause one to seek legal advice well before the planned nuptials. If the bride and groom have children from prior relationships whom they wish to inherit their estate, it is important that they appreciate that the Family Law Act has significant implications for them, not only on separation but also on death. Usually, a marriage contract is strongly recommended, but it must be a contract specifically drafted to meet the couple's particular situation, needs and wishes.

It is also important to note that a marriage revokes a will unless the will has specifically been made in contemplation of the marriage, so that along with a marriage contract, the couple must execute new wills. If no new will is made, and a spouse dies, therefore without a will, the wife (or husband) will inherit the first $200,000.00 of the estate and one-half or one-third of the residue, depending upon how many children he/she has. In most later-in-life second marriages, this is not a result most couples would want.

Often in second marriages, particular thought and care must be given to the matrimonial home which may continue after the marriage to be owned by one spouse, her intention being that eventually this asset will form part of her estate and pass to her children. If that spouse dies leaving her husband surviving and they have a marriage contract that the house remains hers, how long after her death will the other spouse be entitled to continue to reside in the house? This should be dealt with in both the marriage contract and in the will. The marriage contract and the new will must be compatible and will usually be drafted at the same time.

In summary, before making important business decisions, before making important financial decisions relating to family members, and certainly before entering into a second marriage, seek legal advice.

L. Jane Rutherford is a partner at Howell Fleming LLP and practises in Family Law and Civil Litigation.