Intra-Family Loans, A Cautionary Tale

The area and practice of family law is shaped by and evolves through societal change, legislation, global events (like a pandemic), and through judicial decisions of the Courts in Ontario and across Canada. FamilyMatters is the Lerners Family Law Group's weekly update on how that change is being made:

Terminating a relationship is often fraught with emotional and financial challenges. Sometimes dividing assets is not as simple as drawing a line down the middle. When you separate, there needs to be a review of both parties' assets and liabilities to determine the net family property. This financial review determines the equalization payment for each person. A debt claimed by a party reduces the net family property of the spouse claiming the debt. This directly impacts the proposed equalization payment by either party, reducing or increasing the amount to be paid. But what happens when one party claims an intra-family loan (i.e. a loan owed to a family member), which