A cautionary example for a family business
Julian’s experience highlights what can happen in the absence of any domestic agreement and a large imbalance of wealth. The 42-year-old executive recently divorced after 16 years of marriage. Married at 26, Julian’s net worth prior to marrying was negligible, despite his privileged background, given he wanted to branch out on his own. He had founded several startups, but these failed to take off. Soon after marrying, however, he joined the family firm. Meanwhile, his now ex-wife was mostly a stay at home parent, with a part-time job as a fitness instructor, a position she had prior to marrying. A talented businessman, Julian was able to significantly grow his family’s business with the help of his parents, along with his own net worth – all during the course of his marriage. His personal net worth is estimated to be approximately $12 million, consisting of a number of commercial rental properties in the downtown Vancouver area as well as the shares he owns in the family business.
With the divorce, Julian sought to ensure his ex-wife was taken care of financially, and proposed the transfer of full ownership of the family home, worth $4 million, to his ex-wife, as well as providing monthly spousal-support. However, in the absence of a prenuptial agreement and in line with British Columbia’s Family Law Act and Divorce Act, the courts ruled with a different equalization and support calculation.
Matters were complicated in that much of Julian’s net worth was represented in shares of the family business and real estate, which is not liquid. The result was that significant restructuring was required of Julian’s personal and business assets where sales needed to occur on a timely basis, not necessarily at the representative value, and substantial legal and other costs were incurred.
Quebec residents must seek the advice of legal counsel practicing civil law in Quebec for any matters concerning family law. The province of Quebec is regulated by its own rules according to the Civil Code of Quebec.
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