The Alberta Court of Appeal has confirmed the Court’s jurisdiction to prevent a corporation from disposing of property during a family dispute. While a corporation is an independent legal entity, a preservation may be ordered if the corporation is not operating at arm’s length from one of the spouses involved in the family dispute.
The citation for this case is 2018 ABCA 443.
This is not new law. Family law has evolved to permit the ‘breaching of the corporate veil’ in order to determine a spouse’s income, assets and property interest that are subject to division. The same holds true for family trusts. Corporations and family trusts are no substitute for properly written and executed legal contracts – cohabitation agreements, prenuptial agreements and marriage contracts.
Do you have a family business or family trust? Ask us if you are at risk of this type of order.