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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 10-05-2013, 12:32 PM
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Default Factor 65 and other questions

My wife and I have been together for about 12 years and have two young kids. We've been in counselling for over 2 years and it doesn't seem to be helping a whole lot. We both work full time and our incomes are just about equal, she may make slightly more than me depending on the year. We've got a fair amount of debt with the mortrage, car, LOC, etc.

Lately my thoughts have been turning to the logistical aspects of a divorce but I really don't have a clue where to start. A colleague of mine informed me of the '55 factor' rule, which I'd like to know more about. I was told the number was 55, but am reading on here that it's in fact 65. Was my colleague mistaken or does that number change depending on circumstances?

Also, while my wife does work full time, she would stop working if the had the opportunity. If she's working full time, then we divorce, then after the divorce she either stops working or loses her job, am I going to be responsible for supporting her?

Thanks for any and all advice, I greatly appreciate it.
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Old 10-05-2013, 02:09 PM
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This is going to sound cold, but if you really don't foresee the marriage counselling changing anything, separate NOW, before she drops her job.

The 65 thing is about spousal suppport. I am not aware of anything special about 55. Right now, you are both self-sufficient adults, and she has little to no claim for spousal support. After separation, it would be entirely her decision if she should work or not, and you would not have to support her. If she drops her job and the marriage breakup drags on a while after that, she might have more of a case for spousal support.

The 65 factor is that if age at separation plus length of marriage are over 65, then IF spousal support is deemed necessary, it can be indefinite in duration. How old are each of you? Since your marriage was 12 years, unless she's 53, you don't have anything to worry about. And since she has been employed and makes about the same or more than you, she probably won't get past the determination of entitlement step either, much less to the determination of duration step.

Read up all over the forum for starting points about separation and divorce. Here's a quick summary of things you'll be considering though:

Four aspects to separation: Equalization, Child Custody, Child Access and Spousal Support.

Equalization
this is division of property, assets and debts. The default is that each spouse calculates their net worth at date of marriage and at date of separation. The value of the matrimonial home is always considered to be zero at marriage date, even if one spouse owned it beforehand. Then both amounts are pooled and divided by two. So each spouse leaves the marriage with the same increase in net worth over the course of the marriage. This is just a bunch of math. You don’t have to divide everything exactly down the middle – one person could keep their pension while the other gets the RRSPs, one person keeps the marital home and the mortgage while the other gets the van plus some cash, whatever works for you and makes it add up fairly. Sit down and figure out your numbers. If you have a lot of debt, you'll probably have to sell your house as neither of you could qualify to take over the mortgage on your own. Then apply the proceeds to whatever debt can't be divided up. Then see what's left.

Child Custody
this is decision-making for the big issues related to the children, education, religion, health, that sort of thing. Assume joint, unless one spouse is truly completely disinterested, or abusive to the children.

Child Accessthis is the residential arrangements for the children. Assume 50-50 time sharing. This is becoming more and more the standard anyway. Consider possible schedules (most common are week about or 2-2-5-5), equitable division of holidays, etc. Also good stuff to have here is Right of First Refusal and restrictions on moving the children, changing schools, notification/consent for travel, etc. Once access is determined, child support can be calculated automatically.

Spousal Support
this is financial support from a high income spouse to a low income spouse, who got that way due to career sacrifices like staying home to care for children or moving for the benefit of the other spouse. It sounds like this won’t be an issue in your case.
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Old 10-05-2013, 02:13 PM
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Thanks very much for the reply, Rioe. She's 39 and I'm 37, I thought the determinant was 55, which is why I was getting antsy. If it's 65 I've got lots of breathing room.

I agree with your advice, and it doesn't sound cold, just logical. If there weren't children involved it would be very much cut and dried.

Thanks again!
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Old 10-05-2013, 02:18 PM
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Quote:
Originally Posted by 83Magna View Post
Thanks very much for the reply, Rioe. She's 39 and I'm 37, I thought the determinant was 55, which is why I was getting antsy. If it's 65 I've got lots of breathing room.
The fact that she has a job equivalent to yours is your breathing room. If she even mentions spousal support at all during any separation negotiations, she's obviously being demanding and unreasonable.

I'd worry more about this debt that you mentioned. Sounds like you might have to sell your house and both start renting. That's a hard thing to deal with, and will cause much stress, which tends to make people demanding and unreasonable.
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Old 10-05-2013, 07:16 PM
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Advice? Work on your marriage--get rid of the debt, and focus on your children. Divorce is ugly even when it ends in what I perceive as fair.
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Old 10-05-2013, 10:23 PM
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My advice would mirror that of RIOE. Dump her NOW !!! If things aren;t good now - I doubt it will get better over time. It's a relatively short marriage (gets ugly after 20 years or rule of 65), she makes about what you do. As long as you get 50/50 there shouldn't be any CS payable (research Child Support -CS offset) since you both make the same which should also render Spousal Support to her irrelevent.

If you stay with her and she quits/loses her job (you mention she's prone to quitting her job) then all bets are off ! She can nail you 6 to 12 years SS and big CS even IF you get 50/50 of kids.

I know it sounds cold, but with Family Law in Canada doing "the right thing" (sticking with your spouse, helping her financially, etc.) is SEVERELY punished - just ask some of the guys here.

You have a relatively good situation NOW which will greatly minimize any financial damage she can do to you - it won't get any better than it is now BUT it could get a lot worse (ie. if she loses her job and the longer you're with her the higher the SS penalty). Do your homework, get a good Family Law lawyer, get everything ready to go and then get the hell out and don't ever think of getting married/common law again !!!

Good luck !
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Old 10-05-2013, 10:37 PM
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Many thanks for the advice. Like I said, if there weren't my daughters to consider it would be an easy decision. As mentioned, even if we split and share custody 50/50, even if there is no SS or CS coming from me I'd definitely have to rent, and so would my wife. Right now we provide a good home for the kids, and it's not venomous enough to affect the kids, at least not yet. It stops me from pulling the trigger and starting the proceedings.

If I was somehow able to split and still was financially able to buy another home for myself and girls it would be cut and dried, but at this point it's not. I knew it wouldn't be easy!

Again, many thanks for all the different viewpoints, all are very much appreciated.
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Old 10-05-2013, 10:43 PM
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To 83MAGNA...

I appreciate your position, and certainly am not trying to push you to anything you are uncomfortable with, BUT consider....

-What if your wife does some research and decides to come up with some lame excuse to quit her job and you still stay together for a few years. Then she decides to pull the trigger on divorce (keep in mind its irrelevent WHY).

NOW.... there is a big income gap between the two of you.... If you thought money was tight with NO CS and SS, how bad is it going to be IF NOW you get nailed with SS and CS (basically kiss 40-60% of your income good bye). Maybe now you could at least rent a decent place, if she screws you for CS and SS you would be lucky to be living in a filthy basement appartment if not the back of your car.... Think about it......
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Old 10-06-2013, 08:59 AM
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Quote:
Originally Posted by 83Magna View Post
Many thanks for the advice. Like I said, if there weren't my daughters to consider it would be an easy decision. .
Bad bad bad attitude.

I'm a parent and I know where you think you're coming from. If the marriage has failed, you aren't doing your children any favours staying together for them. I don't know the situation between you and your spouse, but it will turn toxic eventually.

If you think you can stay with her and keep it just a financial arrangement, then MAKE A FINANCIAL CONTRACT. Speak to a lawyer and find out what will be reasonable and binding. If the spouse won't agree, then this will be preview of what you will go through in the future.

Otherwise you are in a financial partnership with someone who is not going to contribute equally, but will take money out of the partnership equally, and demand an equal split upon disolution, and demand continued payments after disolution.

Then you will be complaining about family law.
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Old 10-06-2013, 09:52 AM
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Exactly Mess! It's so much better for children to be raised in separately poor but happy homes than it is to be raised in a dysfunctional family who live in a nice house. Parental stability and mood trumps material things.

That said, however, can you separate now, get out of financial co-dependence, and then just have a long in-home separation? Close all joint accounts, contribute 50-50 to expenses, sleep in separate rooms, work in a separation agreement, etc, but keep raising your children in tandem in the same house. That way, you have established a separation date at which mutual financial reliance ended while she had a job, so you have the chance to avoid a possible spousal support demand, but you also have an adjustment period to build up savings for two new homes and pay down joint debt, and the children have a period of time to get used to the idea of someday living apart.

Many people on here would tell you that an in-home separation is hell, but it sort of sounds like what you are planning anyway, only without the financial protection.

We've seen several posters on here talking about how they stayed in their bad marriage for the sake of the kids, and then complaining about how much worse their financial situation ended up because of it. And their kids really aren't any better off. In fact, they are worse off, because the example of marriage they see you modelling is not a good one, so they are that much more likely to go out and get into a bad marriage themselves, thinking that is normal.

You know what your situation is right now, and aside from the debt, it looks good for starting over financially. You don't know what could happen in the future. If you're afraid of your ex quitting her job in the future and you being obliged to support her, why give her more time in which to accomplish that?

You will do a better job raising your children if you are not under extreme stress, and not giving away half your income.
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