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The Rural Voice, 1991-05, Page 18NEW & USED f STEEL 'e) n h u d n g e p a Sf-SALVAGE Hwy. 6 & 10 Owen Sound 519-376-0420 Z SALES SERVICE financing available AYTON Bev Schenk 519-799-5584 HANOVER Larry Eller 519-364-1599 14 THE RURAL VOICE FARM SPOUSES SHOULD PLAN ON DISPOSITIONS Many years ago, if a farm was solely owned by one of the spouses, it was very difficult for their partner to claim an interest in the family farm in the event of a marriage breakdown. To rectify this situation, the courts resorted to a legal remedy called "a constructive trust." The constructive trust was designed to allow the untitled spouse to claim that the titled spouse held the property for their benefit. Originally, this remedy was available only to a spouse who could prove a specific contribution of money or mo- ney's worth to the acquisition, mainte- nance, or continued upkeep of a specific piece of property. If the untitled spouse only performed services that would be expected of a typi- cal farm spouse, the constructive trust did not arise. This was because the labours were not directed towards a specific piece of property, but rather to maintain the farm family as a whole. The maintenance of the farm was incidental to this overriding sense of family duty. Many of the family law regimes in Canada were amended to correct this in- equality of treatment. However, as time passed, it became apparent that provincial laws had in fact not gone far enough to protect untitled spouses. As a result, the courts again were called upon to re -think the application of the constructive trust, particularly in cases involving family farms. Recent case law has clearly established that the courts intend to look at traditional farm families as being partnerships in fact, if not in law. Therefore, whcn a marriage breakdown occurs, the courts typically, if necessary, will impose a constructive trust upon the titled spouse. There are certain requirements which must be met for a court to find a construct- ive trust. First, there must be a contribu- tion directly or indirectly towards the ac- quisition, maintenance, and upkeep of the farm in the broadest sense. While money contributions are important, they are not the main consideration. Primarily, the court looks at whether or not there was a sharing of labours according to each part- ner's ability. Secondly, there must be a correspond- ing benefit to the titled spouse. This simply means the titled spouse must have been enriched as a result of the labours or contributions of the untitled spouse. Thirdly, the untitled spouse must have been deprived of financial gain as a result of contributing to the property of the titled spouse. If all of the property is owned by the titled spouse at the time of separation, the untitled spouse has been deprived. Such cases become complicated in tra- ditional farm families where the property has been gifted to or inherited by the titled spouse from his family. There is no clear cut rule that the untitled spouse will be entitled to 50 per cent of the interest in the family farm in such situations. Generally, the courts will strive to recognize the dif- ferent sources of contribution and perhaps award the untitled spouse a 30 per cent to 40 per cent interest. Much will depend on the evidence called as to the nature of the family life, the length of the marriage, the respective contributions of the parties, and the court's sense of fairness. As we have discussed in previous Agrilaw columns, it is much better to establish an understanding or agreement in writing that sets out the rights of the parties that undertake the uncertainty and expense of litigation at the time of separation. Usually, people are less reasonable about what is fair when they are separated. The time for farm spouses to plan their affairs is when they get along.0 Agrilaw is a syndicated column produced by Cohen, Melnitzer, a full service London law firm. ilamoody Hassan, an associate in the firm, practises in the area of family law. Agrilaw is intended to provide information to farmers on subjects of interest and importance. The opinions expressed are not intended as legal advice. Before acting on any information contained in Agrilaw, readers should obtain legal advice with respect to their own particular circumstances.