Show all of your steps and calculations. You must provide explanations for the decisions you make. You should refer to the legislation in support of your choices, where appropriate. (10 marks)

Question

Aisha and Abraham have been married for 15 years. They have just separated. Using the following facts,

a. Calculate the net family property of each spouse.

b. Calculate the equalization payment and who will be making it.

Abrahams financial situation:

At the date of marriage

No assets

Had a student loan worth $100,000.00

During the marriage

Lived in the matrimonial home

Inherited IBM stock from his sister worth $100,000.00

In her will, his sister left instructions that the income from the IBM stock was not to be inherited

He also inherited a cottage from his sister, valued at $175,000.00. The will indicated that he was not to share any income that the cottage generated. He and his wife resided in the cottage every summer until they separated

Valuation Date

The IBM stock is worth $180,000.00

The stock has produced dividends of $25,000.00

The cottage is worth $250,000.00

Aishas Financial Situation

At the date of marriage

Owns a house worth $290,000.00. There is no mortgage on the house

Owns a car worth $8,000.00

Owns bonds worth $15,000.00

She does not have any debt

During the marriage

She and Abraham live in the house until they separate

She wins a lottery worth $250,000.00, which she deposits into a new savings account

She inherits a rental property worth $310,000.00 from her mother. The will is silent on the income the rental property generates.

Valuation date

She still lives in the house, which is now valued at $500,000.00

She continues to have the funds from her lottery winnings in a separate bank account. The bank account has appreciated in value to $290,000.00

She continues to own the rental property which is now worth $420,000.00