Protecting new Spouse's Assets

[TODivorce]

In the midst of waiting for my divorce certificate however corollary issues are still to be dealt with (ex is making a claim for support and proceeds from sale of matrimonial home are sitting in trust with real estate lawyer). I am getting re-married shortly (after 4 years of separation) and want to ensure that my new wife's assets are protected as ex and I work out support issues etc. (i.e. I have already submitted my sworn financial statement and obviously don't want to include the assets of my new wife which are much more than mine if I have to do a revised statement at some point). Any thoughts? Thanks in advance.....

[logicalvelocity]

TODivorce,

That is a difficult position to be in.

The first being the issue of spousal support and being remarried and having an additional income earner in your home. As such your living expenses are reduced leaving you with more disposable income.

Child support amounts if applicable are based on your income alone.

Assets are a different story. Your "wife to be" assets that will brought into the future union will not be subject to existing net equalization with your first spouse.

lv

[KScull]

LV,

I have a question about the amount of disposable income and ability to pay.
Once a non-custodial parent remarries, is it only the spousal support that would include the income of all parties or does child support work the same way? That is if the non-custodial parent remarried, like TODivorc,e where the new partner has significant assets, can the custodial parent file for an increase in “Child Support” based on the non-custodial parent's increased "ability to pay"?

I have often wondered about this and assumed that in the event a non-custodial parent married a well off new partner, then the custodial parent had the right to file for an increase in child support based on the non-custodial parents new ability to pay more as the new partner would be assumed to cover some if not a significant amount of the household bills previously the non-custodial parent paid alone.

[logicalvelocity]

KScull,

That is an excellent question, which I will try to answer.

As you mentioned,

Once a non-custodial parent remarries, is it only the spousal support that would include the income of all parties or does child support work the same way? That is if the non-custodial parent remarried, like TODivorc,e where the new partner has significant assets, can the custodial parent file for an increase in “Child Support” based on the non-custodial parent's increased "ability to pay"?

Generally as a starting point child support is calculated by cross-referencing an individuals previous years income (line 150) of their respective tax return against the Child Support Guidelines. In situations where a payor's income fluctuates significantly from year to year, the last three years (line 150 tax return average amounts is used and compared against the child support guidelines.

With that backdrop,

If an individual remarried and their new spouse earned significant income and they shared expenses in their household, It makes sense that they have an increased ability to pay more the guideline amount. However, the child support guidelines really pay no attention to either parent's living expenses unless either one of them brought forth a claim of undue hardship and qualified the criteria of the listed respective regulation.

For claims of undue hardship, lets refer to the appropriate regulation.

Family Law Act, Ontario REGULATION 391/97, Amended to O. Reg. 102/06

CHILD SUPPORT GUIDELINES

http://www.e-laws.gov.on.ca/DBLaws/R...391_e.htm#BK34

Undue hardship

10. (1) On the application of either spouse or an applicant under section 33 of the Act, a court may award an amount of child support that is different from the amount determined under any of sections 3 to 5, 8 or 9 if the court finds that the parent or spouse making the request, or a child in respect of whom the request is made, would otherwise suffer undue hardship. O. Reg. 391/97, s. 10 (1).

As listed in the regulation; Either spouse may bring forth a claim of undue hardship and seek a different amount of child support other than the guideline amount.

Circumstances that may cause undue hardship

(2) Circumstances that may cause a parent, spouse or child to suffer undue hardship include,

(a) the parent or spouse has responsibility for an unusually high level of debts reasonably incurred to support the parents or spouses and their children during cohabitation or to earn a living;

(b) the parent or spouse has unusually high expenses in relation to exercising access to a child;

(c) the parent or spouse has a legal duty under a judgment, order or written separation agreement to support any person;

(d) the spouse has a legal duty to support a child, other than a child of the marriage, who is,

(i) under the age of majority, or

(ii) the age of majority or over but is unable, by reason of illness, disability or other cause, to obtain the necessaries of life;

(e) the parent has a legal duty to support a child, other than the child who is the subject of this application, who is under the age of majority or who is enrolled in a full time course of education;

(f) the parent or spouse has a legal duty to support any person who is unable to obtain the necessaries of life due to an illness or disability. O. Reg. 391/97, s. 10 (2).

If any of the undue hardship thresholds are met by either of the parents as listed in 10(2) above, Standards of living must be considered. As listed in the regulation:

Standards of living must be considered

(3) Despite a determination of undue hardship under subsection (1), an application under that subsection must be denied by the court if it is of the opinion that the household of the parent or spouse who claims undue hardship would, after determining the amount of child support under any of sections 3 to 5, 8 or 9, have a higher standard of living than the household of the other parent or spouse. O. Reg. 391/97, s. 10 (3).

Applying the Standard of living criteria

Standards of living test

(4) In comparing standards of living for the purpose of subsection (3), the court may use the comparison of household standards of living test set out in Schedule II. O. Reg. 391/97, s. 10 (4).

continued

[logicalvelocity]

from previous

As listed in Schedule II

COMPARISON OF HOUSEHOLD STANDARDS OF LIVING TEST (Subsection 10 (4))

Definitions

1. The definitions in this section apply in this Schedule.

“child” means,

(a) in cases where the Divorce Act (Canada) applies, a child of the marriage or a child who,

(i) is under the age of majority, or

(ii) is the age of majority or over but is unable, by reason of illness, disability or other cause to obtain the necessaries of life, or

(b) in cases where the Act applies, a child who is a dependant under the Act; (“enfant”)

“household” means a parent or spouse and any of the following persons residing with him or her,

(a) any person who has a legal duty to support the parent or spouse or whom the parent or spouse has a legal duty to support,

(b) any person who shares living expenses with the parent or spouse or from whom the parent or spouse otherwise receives an economic benefit as a result of living with that person, if the court considers it reasonable for that person to be considered part of the household, and

(c) any child whom the parent or spouse or the person described in clause (a) or (b) has a legal duty to support; (“ménage”)

“taxable income” means the annual taxable income determined using the calculations required to determine “Taxable Income” in the T1 General form issued by the Canada Revenue Agency. (“revenu imposable”)

Test

2. The comparison of household standards of living test is as follows:

STEP 1

Establish the annual income of each person in each household by applying the formula

A – B – C

where

A is the person’s income determined under sections 15 to 20 of these guidelines,

B is the federal and provincial taxes payable on the person’s taxable income, and

C is the person’s source deductions for premiums paid under the Employment Insurance Act and contributions made to the Canada Pension Plan and the Quebec Pension Plan.

Where the information on which to base the income determination is not provided, the court may impute income in the amount it considers appropriate.

STEP 2

Adjust the annual income of each person in each household by

(a) deducting the following amounts, calculated on an annual basis:

(i) any amount relied on by the court as a factor that resulted in a determination of undue hardship, except any amount attributable to the support of a member of the household that is not incurred due to a disability or serious illness of that member,

(ii) the amount that would otherwise be payable by the person in respect of a child to whom the order relates, if the pleading of undue hardship was not made,

(A) under the applicable table, or

(B) as considered by the court to be appropriate, where the court considers the table amount to be inappropriate,

(iii) any amount of support that is paid by the person under a judgment, order or written separation agreement, except,

(A) an amount already deducted under subclause (i), and

(B) an amount paid by the person in respect of a child to whom the order referred to in subclause (ii) relates; and

(b) adding the following amounts, calculated on an annual basis:

(i) any amount that would otherwise be receivable by the person in respect of a child to whom the order relates, if the pleading of undue hardship was not made,

(A) under the applicable table, or

(B) as considered by the court to be appropriate, where the court considers the table amount to be inappropriate, and

(ii) any amount of child support that the person has received for any child under a judgment, order or written separation agreement.

STEP 3

Add the amounts of adjusted annual income for all the persons in each household to determine the total household income for each household.

STEP 4

Determine the applicable low-income measures amount for each household based on the following:

Low-income Measures

Household Size Low-income Measures Amount

One person

1 adult $10,382

Two persons

2 adults $14,535

1 adult and 1 child $14,535

Three persons

3 adults $18,688

2 adults and 1 child $17,649

1 adult and 2 children $17,649

Four persons

4 adults $22,840

3 adults and 1 child $21,802

2 adults and 2 children $20,764

1 adult and 3 children $20,764

Five persons

5 adults $26,993

4 adults and 1 child $25,955

3 adults and 2 children $24,917

2 adults and 3 children $23,879

1 adult and 4 children $23,879

Six persons

6 adults $31,145

5 adults and 1 child $30,108

4 adults and 2 children $29,070

3 adults and 3 children $28,031

2 adults and 4 children $26,993

1 adult and 5 children $26,993

Seven persons

7 adults $34,261

6 adults and 1 child $33,222

5 adults and 2 children $32,184

4 adults and 3 children $31,146

3 adults and 4 children $30,108

2 adults and 5 children $29,070

1 adult and 6 children $29,070

Eight persons

8 adults $38,413

7 adults and 1 child $37,375

6 adults and 2 children $36,337

5 adults and 3 children $35,299

4 adults and 4 children $34,261

3 adults and 5 children $33,222

2 adults and 6 children $32,184

1 adult and 7 children $32,184


STEP 5

Divide the household income amount (Step 3) by the low-income measures amount (Step 4) to get a household income ratio for each household.

STEP 6

Compare the household income ratios. The household that has the higher ratio has the higher standard of living.

O. Reg. 391/97, Sched. II; O. Reg. 446/01, ss. 8, 9; O. Reg. 102/06, s. 5.

In all it is a multi step process that has defined criteria. If the parent bringing forth a undue hardship claim qualifies under the listed criteria and has a lower standard of living; Child support may be calculated to a different amount other that what the guidlelines provide. I am not clear in regards to how the the new payable amount is calculated other than it will higher or lower than the calculated default table amount without any consideration to undue hardship.


lv

[KScull]

Thank you very much, that was beyond an answer.