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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 07-07-2010, 02:19 AM
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Default Spousal Support NOT Wanted, Can She Sue For it After???

Here are some facts (sorry for the length but I want to cover all details if possible). Getting divorced, very amicable situation, both happy to get out. 1 child age 9. Child support is obvious. Regarding assets, will split all including home, both should end up with 30-50k each in cash from house sale. I make 60k/year, wife unemployed after selling business late last year and looking for a job. She wants to get it over with asap to move on. We plan to do everything in best interest of child.

The kicker is she doesn't want spousal support even though she's unemployed. We have a car worth 10k (paid off) and a another car that's a lease that has 3 years left on it (20k balance owing now plus the '14k payout after year 4). She wants the paid off car (asset), I keep the lease (liability).

I can only afford this if I don't have spousal support to pay. It's essentially 15k in her favour (5k from 1/2 of 10k asset and not assuming 10k from 1/2 of 20k liability).

The question is, if this is all agreed to, including child support and everything, in a separation agreement (done ourselves since we're on good speaking terms and with lawyer review to make it binding), could she get the car, wait a few months then take me to court to try and get spousal support for whatever reason (hardship/etc)? She has a graduate degree so she's not unemployable and has an expectation of good earnings.

I realized that if I had to pay her approximately $800-900/mth in spousal support (guesstimate based on split of income) in addition to child support, that would be a 16mth term of support to equal the inequitable division of cars.

What's the deal with spousal support in a separation agreement - can it be changed? (she'll have 30k-50k to start over so she's not destitute.

And also, can I put in the separation agreement that regarding the cars, the asset she keeps and liability I assume is in lieu of spousal support and would that make it more binding? Or if she is able to change the spousal support terms, can I change the car terms.

Thanks!

Dan
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Old 07-07-2010, 09:15 AM
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With children, SS is calculated AFTER child support is paid/received and after tax is paid and benefits are received. So if she is unemployed and caring for the child full time, she is receiving I believe around 5-6k a year tax free child tax benefit. She has no income so she is not paying any taxes. She is receiving child support. Meanwhile you would be looking at after tax income and after child support is paid. Make your napkin calculation based on those numbers and it may look a little less scary.

She cannot just not work even if she is trying to find work and failing. She has a degree, she ran a business, she is employable, you can imput an income to her. This would further reduce suppport payments, however beware if she is now caring for the child full time. The child should be in school/camp, she should be able to work, but keep this caveat in mind.

The car/lease situation could be written up as you suggest, the difference could be considered a lump sum support payment. This isn't in your favour, a lump sum payment would not be tax deductable, where a monthly payment would be. You would also be agreeing to an entitlement to support, which makes it easier for her to follow up on. You would cover your ass best if you include the vehilces in the equalization calculation, and then take the extra from the sale of the house (for example) or agree in writing that you will defer the equalization payment for up to two years or when she achieves full time employment, whichever comes first.

Doing as I suggest, defering the payment for a couple of years, means that if she seeks support later, you could point to this payment then and trade it off as a lump sum SS. This way you have some insurance for later, possibly receive the equalization on the car later, you give her a break while she looks for work, and your monthly budget right now is confirmed.
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Old 07-07-2010, 10:19 AM
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so her refusing (not just 'not getting' but actually refusing spousal support) in the separation agreement doesn't mean she can't go after it later? i'm guessing one reason for refusing is because she wants to take a short course and get into an industry where wages are low in the beginning (but its a passion) so she doesn't want to have to seek employment that is up to her potential for earning a higher wage plus i think she might be living rent free (and food covered) at her mothers for a while so she isn't afraid of expenses...but that's a guess at this time.
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Old 07-07-2010, 11:05 AM
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If you have it written in the agreement that both parties agree that they give up all rights to seek SS, and you both have independent legal reviews done, you should be fine.
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Old 07-07-2010, 03:14 PM
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Thanks for the advice Mess and OnDad! I'm really not trying to maximize my end, just avoid any major surprises later based on not knowing how the law works. I don't mind losing on the tax credits if that compromise avoids a lot of legal bills because we aren't willing to meet in the middle. Although I'll take em if I can get em

Dan
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Old 07-07-2010, 03:17 PM
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Mess, I think telling her she'll owe me the equalization payment in the future or that it comes to me out of her share of house sale would kind of screw the plan up since she's willing to forgo support if she gets the paid off car and doesn't have to pay for her share of the lease? Did I misunderstand your point?
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Old 07-07-2010, 08:40 PM
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From what I've learned in my reading so far is that an ex-spouse can lodge a new claim within two years of the finalization of an uncontested divorce. For a contested divorce, the ex-spouse gets another kick at the can that's good for seven years.

However, once the two (or seven) years fully elapse, claims are statute-barred, meaning the law does not allow a court to accept the claims and rule on them.

The only tactic I can think of that would head off the possibility of a future claim is to try to hammer out a divorce settlement at the case conference, and ask the judge to make an order cementing the settlement, with the proviso that the settlement is a full and final settlement.

By the way - this is not legal advice, and I am not a lawyer, nor do I play one on TV!
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Old 07-07-2010, 08:46 PM
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Quote:
Originally Posted by DanTess View Post
Mess, I think telling her she'll owe me the equalization payment in the future or that it comes to me out of her share of house sale would kind of screw the plan up since she's willing to forgo support if she gets the paid off car and doesn't have to pay for her share of the lease? Did I misunderstand your point?
And you are worried she will take the car and then go after support anyway. Do you trust her or not?

If you want to cover your ass, then the deal I am suggesting is that she doesn't pay anything NOW, while she is looking for work and can't afford it. For now she gets the car "free". But she still owes you for it.

She doesn't have a strong claim now, but if she can't find work for the next 2 years, she will have a stronger claim. If she does find work, then her claim pretty much disintigrates, she is able to support herself.

You have to decide what you are willing to trade off.
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Old 07-08-2010, 12:19 AM
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Quote:
Originally Posted by Mess View Post
And you are worried she will take the car and then go after support anyway. Do you trust her or not?
it's not that i'm worried it'll happen, i want to know whether it CAN happen - i'm asking if it CAN BE done. is signing off of SS in the separation agreement binding or is it like CS where it can NEVER be bargained away.
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Old 07-08-2010, 12:29 AM
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There are cases where it has been opened up years afterwards. Whether this can happen to you, no one can say. Usually an unforseen material change in circumstance. Either you start earning much more money (everyone hates this but it's true) or she for unforseen reasons, despite her best efforts, cannot obtain employment.
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