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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 04-29-2011, 12:57 PM
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Default Child with high section 7 expenses and spousal support

Hello all: I apologize as I am new to this discussion board... I did some searching on the matter and didn't come up with anything that specifically applied to my situation.

Here is the story:
My ex and I are separated now for 5 months. We have 1 autistic son who is 9 years old.

I work at reasonable job and earn around $65K per year.

My ex has never worked but has an extremely wealthy father. She has used a credit card supplied by her daddy for $5000 per month in expenses that were paid for without question over the course of our 11 year marriage. She had a taste for high end shopping and fine dining. Within 2 months of our separation she was moved in to a high end $300K townhouse purchased for her by her father. She also has a large sum of undisclosed money in trust from her late mother's estate. I am still living in the matrimonial home and will be selling it shortly.

She has also struggled with mental illnesses throughout our marriage and was a key factor that contributed to its eventual failure.

Currently our son lives with her Mon-Fri whereas I get to have him on the weekends.

Our son attends a private school for autistic children that costs $10,000 per year in tuition fees and an additional $3000 worth of fund raising obligations.

I am paying the guideline amounts for child support and I am OK with sponsoring 90% of the section 7 expenses but she is suing me for $1400/mo spousal support in addition to all that. If I was to agree to her demands then I will have at best $1000 per month left for myself to live off.

I am afraid that if she continues down this path then I will no longer be able to afford to send our son to the school program in which he has been flourishing which will force him to go to public school, and I will be the bad guy for not being able to pay. I don't mind paying spousal support but in my mind our son comes first and there simply isn't enough money in my salary to go around. Considering her access to wealth/funds through her father I really don't see why she needs the money other then as a means to punish me. Do I have any legal grounds to fight her claims for spousal support as she is clearly a far cry from being poor.

I am also trying to find a way to maximize the amount of income that is not getting taxed away. As a consequence of paying child support, I can no longer claim the "disability tax credit transferred from dependent" which is a huge tax break that could allocate more funds to cover his section 7 expenses. Is there any way under the current scenario that I might still be able to claim this? Like what if the money I give to her is called "spousal support" instead of "child support"? How does my shared custody situation impact this claim?

I am trying to model various tax situations to see what keeps the most amount of money out of Ottawa but I am not sure if I understand the rules correctly.

Any input you all have on this situation is greatly appreciated.
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Old 04-29-2011, 01:30 PM
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I am by no means an authority, but I would imagine that based on the status quo of her receiving $5k a month from her father, you could argue that she has no need of additional support from you. Of course, you would still be paying child support. You could also argue that you are paying 90% of section 7 expenses based on proportional incomes, and that you would not be able to continue paying this share of the crucial private school if you also had a spousal support obligation. Phrase it so that it's clear their selfish financial demands are not in the best interests of the child.

You don't want to phrase anything so that it sounds like you are not living up to your child support obligation.

However, do some reading up on imputing income. Your ex should be doing something to be supporting herself and her child, not just demanding money from you. If she chooses not to work, impute a minimum wage income to her and use it for calculations of child and spousal support. If she can't work because of her mental health, use a disability pension amount instead. She can't just have no income, regardless of her father's wealth. This will reduce your proportion of the section 7 expenses, which may help you afford the private school, and also reduce any spousal support she could argue is needed.

Another suggestion: you say you have your child on the weekends. See if you can arrange to pick him up at school on Friday afternoon, and return him to school on Monday mornings. That gives you 3/7 nights a week which puts you at over 40% custody. That way, you can use the offset method of child support, which would leave you more income to afford the private school, not to mention see your son more.

Good luck!
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Old 04-29-2011, 02:17 PM
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Trust would have a draw available to her, I assume she cannot access the entire amount, she has to go through the trustee.

What is the average draw she is making against it vs. what she can take from it at a max/year.

The draw on the trust fund should be used to impute her an income rather than full time minimum wage.

This would also be used in the spousal support calculations to determine if she qualifies AND would be used to allocate HER percentage of section 7 (including the private school).

You need a lawyer, and a good one, as that may be a tough sell.
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Old 04-29-2011, 02:32 PM
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You should definitely not pay spousal support given that she (according to you) for 11 years has received 60K tax free from her father per year (which is more than you).

Also what NBDad said is interesting.

Also, she has an obligation to work, or if she is supported by family etc, that that income be used for CS calculations.

Hey, technically maybe she owes YOU SS!!

Also, if she has such income from her dad, you should not be paying 90% of s7.

It is not a matter of if her dad should be supporting her etc, it is simply a matter of what her actual income is - and yours is looked at from a PRE TAX point of view, so whatever she receives from her dad should be adjusted as such
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Old 04-29-2011, 02:54 PM
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I'm a bit suprised that the health insurance premiums that you pay are to be split as s7. Is that in your agreement? (No - I don't know what is the norm, just a vague feeling)
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Old 04-29-2011, 04:26 PM
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Quote:
Originally Posted by NBDad View Post
Trust would have a draw available to her, I assume she cannot access the entire amount, she has to go through the trustee.

What is the average draw she is making against it vs. what she can take from it at a max/year.

The draw on the trust fund should be used to impute her an income rather than full time minimum wage.

This would also be used in the spousal support calculations to determine if she qualifies AND would be used to allocate HER percentage of section 7 (including the private school).

You need a lawyer, and a good one, as that may be a tough sell.
Her trust fund remains undisclosed... I know it exists because it was often referred to during our marriage. At this point its existence is being denied.
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Old 04-29-2011, 04:36 PM
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Quote:
Originally Posted by billm View Post
You should definitely not pay spousal support given that she (according to you) for 11 years has received 60K tax free from her father per year (which is more than you).

Also what NBDad said is interesting.

Also, she has an obligation to work, or if she is supported by family etc, that that income be used for CS calculations.

Hey, technically maybe she owes YOU SS!!

Also, if she has such income from her dad, you should not be paying 90% of s7.

It is not a matter of if her dad should be supporting her etc, it is simply a matter of what her actual income is - and yours is looked at from a PRE TAX point of view, so whatever she receives from her dad should be adjusted as such
Is there anything in the letter of the law allows me to enforce imputing income from family or friend sources (i.e. that which does not show up on a tax return?).

Anything that would carry weight in court? She is refusing mediation
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Old 04-29-2011, 04:47 PM
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Quote:
Originally Posted by vicarious View Post
Is there anything in the letter of the law allows me to enforce imputing income from family or friend sources (i.e. that which does not show up on a tax return?).

Anything that would carry weight in court? She is refusing mediation
there is a lot in CanLii .. look for imputed income gifts family
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Old 04-29-2011, 04:56 PM
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First, you motion to provide financial statements. If she is living beyond her needs on paper, you then motion to have her income imputed at an amount equal to such that would be needed to meet such standard of living.

Meaning, you motion for financial disclosure. She shows she is spending $4000 a month, yet only making $1000. She isn't showing an increase in debts to balance the amounts, so you argue she isn't disclosing income thus you request the courts to impute her income to amount needed to sustain her standard of living.

If I were you, I'd look to get shared custody....taking into consideration the delicate issues that your son may have due to his autism (frequent exchanges may not be healthy for him, or they may be better then longer terms, I dunno...but speak to his doctor). It would affect your c/s and it would be offset by a nominal amount.

She should be paying her proportional share of the schooling (I know you are willing to fall on your sword). If she isn't working, she can get a McJob and make $20k a year. If she won't, you impute her income at a minimum of full time min-wage (if you can't get the funds she gets from her dad/trust included), and then you pay proportionally. Ya, you will still pay 2/3rds the amount. But it is unfair to you, and your son when he is with you, to cause you to be living in financial hardship.
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