Using Joint Savings or a Loan From Family to Pay Legal Fees in Alberta

Legal fees are one of the first big expenses of a separation. Many people reach for the joint account or ask parents for help, then wonder whether that will come back later when property is divided.

There is no one-size answer, because it depends on the facts, the amounts, and what you and your spouse agree or the court decides. This article sets out the questions to think about and the court tools that relate to paying for a case.

This article covers the law of Alberta.

Why the source of the money matters

Money spent on a lawyer is gone, and money borrowed has to be repaid. Either way, it can change the picture of what you and your spouse own and owe. The Court of King's Bench has sole jurisdiction over divorce and property division in Alberta, so any dispute about how spending should be treated would be decided there if you cannot agree.

Whether a particular withdrawal will be accounted for depends on the facts, and a lawyer can confirm how it is likely to be viewed in your situation.

Using a joint account

Taking a large amount from joint savings without telling your spouse can create conflict and mistrust, even if you had access to the account. Some practical points to think about:

• Keep a record of every amount withdrawn and what it was for.
• Consider telling your spouse, or having your lawyer do so, rather than leaving them to discover it.
• Ask whether the two of you can agree in writing on how the spending will be treated later.
• Keep withdrawals reasonable and tied to real legal costs.

Borrowing from parents or other family

A loan from family can look different from a gift, and the difference may matter later. If the money is a loan, put the terms in writing: who lent it, how much, whether interest applies, and when it is to be repaid. If it is a gift, that should also be clear on paper.

Ask your lawyer how a family loan is likely to be treated in your case, and whether your spouse should be told about it. The answer depends on the facts, so avoid assuming it will be handled the way it was for someone else.

Asking the court to deal with costs

A successful party to an application, proceeding or action is entitled to a costs award against the unsuccessful party. That entitlement is subject to the court's discretion and other rules, so costs in family cases are not automatic.

When deciding costs, the court can consider the result and each party's degree of success, the importance and complexity of the issues, and conduct that shortened or lengthened the case. It can also consider settlement offers. The court may order reasonable and proper costs or any amount it considers appropriate, including a lump sum. Where the party ordered to pay is also owed costs, the court may net the amounts by deduction or set-off.

If you need the other spouse to help fund the case, timing matters. Under the Court of King's Bench Family Focused Protocol, interim relief must be requested in the Commencement Document, using Form FL-18 with a supporting affidavit or statements, or the Mandatory Intake Triage package may be rejected. After the Mandatory Intake Triage Conference, further interim applications are allowed only in exceptional circumstances. Whether a court would order one spouse to advance money for the other's fees depends on the facts, so get legal advice before you rely on that route.

What to do next

• Write down every amount you spend on legal fees and where it came from.
• Save statements for joint accounts before and after any withdrawal.
• Put any family loan or gift in writing.
• Talk to your spouse or their lawyer before making a large withdrawal, if it is safe to do so.
• Ask a lawyer whether to request interim relief in your Commencement Document.

If money is very tight, a court fee waiver may cover filing fees, and family court counsellors help people without a lawyer. Legal Aid Alberta is listed as a source of legal advice and representation for eligible people.

Frequently asked questions