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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 09-03-2016, 11:48 AM
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Default Avoiding spousal support possible??

Hi all, glad I found this forum.

I'm going through a divorce right now and we are about to write up our SA. The situation is, I have a high paying job, she hasn't worked in 6 years because of kids at home. Kids are age 3 and 6.

She plans to build a life coaching business from home and I will have the kids half time because I work week on week off......she hasn't had any income YET but she charges $100/hour for her services.

When it comes to splitting assets we are planning to split RRSP/pensions. We also own 3 houses with about $250-300K in equity.
Prior to marriage I owned some farmland that has gone up about $100k since we got married 10 years ago.

My plan is to get her to agree to taking ALL of the home equity and not paying any spousal support. I obviously will pay child support of about $2500/month based on my $200k/year income.

My question is, will giving her the extra equity be enough to get away with not paying spousal support? She seems agreeable and doesn't want to fight each year about it, and wants to keep the lawyer bill as cheap as possible. Spousal at my current income could be as much as $4500/month but she is well trained and set up for success.

This is in Alberta......Thanks in advance.
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Old 09-03-2016, 01:40 PM
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Originally Posted by dantheman71 View Post
.she hasn't had any income YET but she charges $100/hour for her services.
I'm a hand and foot model. I don't have any income YET but I charge $500/hour for my services.

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My plan is to get her to agree to taking ALL of the home equity and not paying any spousal support.
You have about 300k in equity. Your share is 150k. Your proposal is to give her 150k lump sum payment in lieu of spousal support. You also owe her an extra 50k for the increase in value of the farmland. If you keep the farmland and she keeps the house, she is only coming out ahead by about 100k.

You think spousal would be a bit over 4k a month, so about 50k a year. You have been married for 10 years. Her income generating potential has been permanently damaged. I would estimate that you probably owe at least 6 years of spousal, probably more. In other words, you are offering her 100k tax free in return for at least 300k in taxable income.


She WILL go to a lawyer. She has to, the spousal release is worthless to you if she does not. The lawyer will tell her that it is a crappy deal, because it is a crappy deal.

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she is well trained and set up for success.
My hands and feet are well oiled and ready to be photographed.
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Old 09-03-2016, 01:49 PM
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Damn, that's what I was worried about......

One other scenario, what if her business actually takes off and she makes $200k/year or more, can I get out of the spousal support immediately?

Would I be smarter to give her the lump sum and offer 2 years of spousal until our kids are both in full time school??

Just trying to cut the financial ties as soon as possible, I'd rather not be paying for this in 10 years time
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Old 09-03-2016, 01:50 PM
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What if I lose my job along the way? I work oilfield so that is a possibility

Thanks again
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Old 09-03-2016, 02:18 PM
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One other scenario, what if her business actually takes off and she makes $200k/year or more, can I get out of the spousal support immediately?
It depends on what your agreement says. If there is a clause in the agreement that says "If she makes more than X a year then spousal support terminates", well, then spousal support terminates when she makes that much. If you don't have that clause, then no, it likely continues.

Anyhow, I think you are worrying the wrong way. What happens if her business totally fails and she runs out of money and the kids are beginning to suffer? With income like yours, suffer could be defined as "the kids only get one vacation a year instead of the usual three".

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Would I be smarter to give her the lump sum and offer 2 years of spousal until our kids are both in full time school??
I thought you guys were doing week on week off, so what does school have to do with it? Is she going to be primarily with the kids on a "temporary" basis until the kids are in school?

I'm not sure which is better. To me, if you are going lump sum, then you do lump sum. If you are doing payments, you do payments. Others in the forum might have more clarity. Just make sure that the language of what you sign reflects what you want to do. Don't ever assume that anything will be interpreted fairly. If you sign something that turns out to be unfair, you will be screwed.

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Just trying to cut the financial ties as soon as possible, I'd rather not be paying for this in 10 years time
You have kids, you cannot cut ties. Don't let your urge to cut ties tempt you into making a lousy deal.

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What if I lose my job along the way? I work oilfield so that is a possibility
It depends on what your agreement says. I've seen cases where arrears pile up until the payor (you) gets a new job, and then you owe everything still. I've seen other cases where arrears are wiped out because of a material change of circumstances.

I would head that all off and just say in the agreement that getting laid off is a material change of circumstances and that income is assumed to be the greater of actual income or $25,000 a year at that point for support purposes. I'm not sure if that works, but it is what I would try
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Old 09-03-2016, 02:33 PM
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Anyhow, I think you are worrying the wrong way. What happens if her business totally fails and she runs out of money and the kids are beginning to suffer? With income like yours, suffer could be defined as "the kids only get one vacation a year instead of the usual three".

Agreed I'm likely thinking about it the wrong way......the frustration I have it that she will stick with the business idea until it is a complete failure should it go that way. At some point there should be some accountability to get some type of employment.

Good point about the kids tying us for life.....
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Old 09-03-2016, 02:37 PM
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Do you have a GOOD lawyer? (If not PM me and I can give you a name of someone who has experience with oilfield/self-employed high income earners). Your ex will definitely be told by her lawyer she can get more than what you are likely prepared to offer.

Was the farmland you owned prior to your marriage a family farm or part of one? Are the 3 homes you jointly own incorporated into a business? Are you incorporated?

Have you considered gradually reduced SS a/o combination with lump sum? SS is tax deductible to you.
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Old 09-03-2016, 02:42 PM
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Do you have a GOOD lawyer? (If not PM me and I can give you a name of someone who has experience with oilfield/self-employed high income earners). Your ex will definitely be told by her lawyer she can get more than what you are likely prepared to offer.

Was the farmland you owned prior to your marriage a family farm or part of one? Are the 3 homes you jointly own incorporated into a business? Are you incorporated?

Have you considered gradually reduced SS a/o combination with lump sum? SS is tax deductible to you.
Farmland was owned by me for 8 years prior to marriage.
3 homes are joint
and I like the idea of the gradually reducing support
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Old 09-03-2016, 07:35 PM
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I don't like the idea of a lump sum in your case.

Spousal Support is a VERY effective form income transfer. You save 20% at least from the government's hands. It also directly meets the legal requirements

What I would focus on is a spousal support agreement with a fixed termination date with only the possibility of reducing if you lose your job or suffer any income reduction or unexpected expenses (include: types of expenses).

The only reason I would do the equity switch is because you believe that the housing market will crash and you can get the houses off your hands with good consideration. You CAN treat the equity transfer in lieu of spousal support.

I would also get shared custody if i were you - 40/60% even because child support is NOT an efficient form of financial transfer (it is after tax income) on the basis you can live in the same home as the kids even if it means having a nanny deal with the domestic issues. At your income level a nanny is cheaper than child support.

Assume your ex will never have a serious income (retail jobs, call centers etc...) and maybe get married rich at best (most women after divorce only improve their living standard by getting remarried).

Somebody who has no job; is living on the moon if they think they can scam people into being their life coaches.... It is a job based on the fact she knows she can be indefinitely sustained off of you not based on the chance of it being succesful.
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Old 09-03-2016, 08:04 PM
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Something to remember is that spousal support is supposed to identify and resolve, albeit temporarily, the income disparities between the two people. Reason is pretty simple. When two people meld together their incomes they both enjoy a certain standard of living. One person (predominantly the female) stays home to assume a traditional role of homemaker/child care while the other person (predominantly male) works, builds a career. Both contribute to the marriage. There is always much argument on this forum about the value of the contribution of either party which is redundant. The current law (like it or not) intends that spousal support be paid to compensate the individual who stayed at home and gave up a career (with advancement) to raise family and look after home so the other person could advance in their career. Age of individuals and length of marriage is, of course, important factors to consider.

In order to understand SS you have to really understand the above. What SS is intended for. There are many variants of course.

If I were a young male with children facing divorce I would bend over backwards to ensure that my ex upgraded her academic credentials to enable her to go forward and become self-sufficient. Self sufficiency is NOT a minimum-wage job. Too often people overlook this in a rush to get on with things and the find themselves paying SS for too many years. I believe that had they stopped and objectively looked at the situation and honestly evaluated the income capacity of their spouses (at time of initial separation) they would be better off doing whatever it took to ensure their ex's had a good foot up for the future.

So... you can try to short-end things by just negotiating, aggressively, for the cheapest "out" or you can carefully consider the implications for the future. If your ex is unsuccessful in career or business aspirations you can be sure that she will simply come back and ask for more money because she is now demonstrably disadvantaged by her absence in the workforce.
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