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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 11-13-2005, 12:37 PM
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Question Property Division and support

These forums are an amazing resource - Friendly, informative, and incredibily helpful !!

I have been been trying to 'work things out' with my spouse for over a year, but recently she is making it clearer that she wants a Divorce, and I can no longer handle the stress of trying one sided (of course my opinion only)
negotiation where I am constantly to blame.

Married 17 years, 2 boys (5 and 7), no other parties involved.

Several questions for consideration...

The financial questions seem far easier than the emotional ones!!

1) Can legally binding settlements be negotiated in a 'tax effective' way so that my spouse gets the same monies (child and spousal) but paid in a tax advantageous way by me? My spouse gets the same, but I benefit from tax advantages - I am actually willing to 'share' this advantage by paying more?

2) How is investment income treated ?
Is investment income (dividends, capital gains, interest) treated as personal income when calculating spousal and child support?

3) If we divide assets and my wife gets (more than likely) in excess of 1 Million in stocks / shares, etc. Would I still be expected to pay her spousal support?
Does her substantial division of assets (and their earning potential) get considered when setting spousal support?

4) I have an investment company which I started with a $2000 gift and is now worth substantially more (due to good luck, not any investment skills - so no requests for financial advice :-))
I have kept this separate from shared personal assets (in case I screwed up !!) and wondered whether this is considered part of our "family assets" for both property division and investment income after divorce?

5) I love my kids, and am happy to give up my well paying "day job" to bring them up!
Do courts still look at Mothers as more suitable parents than Fathers and give them favorable treatment for custody - be honest ?
I will not use my children as negotiating pawns, so how do I go about this in an amocable way.
I will not settle for anything less than shared custody, but will happily be the main caregiver - suggestions ?

6) My wife can work, but chooses not to. I do work and could choose not to.
Does family court take this into consideration with spousal support?
For example, I could work part-time and still look after my children fulltime, but I take a substantial pay cut. My wife may still choose not to work, even though she can?
Will the courts (probably) say that because I am the 'bread winner' I have to work fulltime and see my children at weekends, while because my wife doesn't choose to work (and would earn less than I if she did), the children live with her and I pay her spousal support?

7) Will prior legal history be 'considerable' in any court proceedings, even though the charges were 'conditionally discharged'?

8) How does privately owned corporate profit get treated ?
I have an active consulting business which retains substantial profits for tax planning purposes. I expect these profits to be considered as part of my annual income, even though they are not paid out. Anyway, I can't guarantee what these profits are from year to year, so can an agreement be drawn up along the lines of 'XYZ percentage of profits, paid on or before an annual date'.
Are these corporate profits considered in the same way for both child and spousal support, or ommitted from any ?

9) If my income (personal and owned corporate profits) goes up after a settlement is reached, do I have to continually increase any spousal support?

10) My children are for life, and I look forward to seeing them through University. I used to think Marriage was for life, but now understand that 'things change!'. I am trying to rationalize why 'spousal support' should be for life? Can anyone point me to resources which will help me better understand why I should continue to pay spousal support to my wife, after she has taken at least 50 percent of our family assets and could definitely support herself in our current modest lifestyle if she got a job - I am genuinely trying to see past any Male chauvinism I may have, and see things from my spouses perspective, but I need help!

To be honest, my wife is going to get a substantial sum of money from family asset division. My children are innocent and need to be financially supported by me and emotionally supported by both of us. I just don't like the idea of my wife sitting back without working, living off my back while limiting access to my children. She could easily get a job, support herself (especially after the asset division), and share the child rearing more equally with me - of course I haven't lived this 'other' life yet !!

Thanks in advance.
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Old 11-18-2005, 07:50 PM
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Hi,

You cannot claim child support as a tax deduction unless the order was made before 1997 when the federal child support guidlines came into force. Prior to this date, child support was tax deductible, and orders after this date are not. However, spousal support is tax deductible as long as it is periodic payments (monthly) and it is court ordered. Lump Sum spousal support is not tax deductible.

You can get more information and details of this topic by reviewing CCRA web pages. I have seen information on this topic located there.
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