Spousal support and career - what is your opinion on this?

[billm]

I wanted to open up a thread about spousal support and its justification.

Specifically here is the scenario that I would like comments on (note this is not my situation).

Two people are married for 10 years, they have two kids, age 8 and 11.

When they met they had essentially no assets, no debts, one had a graduate degree, the other an undergraduate degree, and both were working in their chosen careers.

During the marriage, neither stopped working and followed unincumbered along their career path, except for equal parental leave when their children were born, they both did about the same work around the house and raising the kids. They owned a house with a mortgage, had some savings and debts, and retirement acounts. Despite this nice life on paper they decided to divorce.

They divided all there assets/debts equally, sell the house, and each retained 50/50 custody of the kids. They each end up with $120K in assets.

One spouse makes $90K per year, the other $45K per year.

For child support (CS) they use the 'offset method' where the greater income earner pays the lessor income earner the difference in their child support guideline table amounts. So in this case for Ontario, the table amounts are $1281 and $680, so the greater income earner pays the other $601/month for CS. Section 7 expenses are paid relative to their incomes so the greater income earner pays 2/3 of section 7 special expenses, and the lesser income earner pays 1/3. They decide to adjust the CS amounts and special expense ratio every July when they get their tax returns processed.

What do you think is fair in this situation with respect to spousal support (SS) and for how long? One income earner makes twice as much as the other.

a) none?
b) split money between households evenly?
c) SSAG (what ever it would calc I do not know, but I think essentially b?
d) some other answer you have?

Also, does the size of the difference between their incomes come in to play to decide if SS is warrented? Rember their CS method is supposed to balance the money between the households that is avaiable for rasing the children, so this is just about SS, but if you think that is a factor then let me know.


Looking forward to your comments!

[AtALoss]

D... some other answer. I think what you have described is ideal. The only thing you did not mention was the length of time for spousal. I beleive in a means test. With shared expense for CS from what you describe it appears that they are going to be taken care of. keep it fair in the percentages you describe and expect that there will be unexpecteds. So back to spousal I dont think it a free ride either, She earns an income so is self supporting. Wish I was in that position. But its coming and wanted as I have my pride too. What the tables try to equalized is that difference. I think it would be time limited that is more than fair. Depends I guess on the length of the marriage. Myself was 19.5 yrs so in my situation My best hope is 5 yrs. I'll find out Thursday. Ultimatemately want to move on and upwards.

[first timer]

I feel it should be none, she is self-sufficient, the kids are taken care of financially. Both parents are doing their part for the kids. The parents are responsible for themselves like everyone else once you reach the age of majority.

[today]

Given that the children are cared for (financially), each is self sufficient (financially), assets divided equally, the marriage is over the obvious answer is "A" none.

Of course it doesn't work that way, I look forward to different opinins view points on this scenerio

[mominont]

I don't believe any spousal support should be required with the scenario listed above!

[midnightvampyr]

In that you were married for 10 years the present legislation regarding spousal support would dictate that you would be responsible for paying spousal support for at least that long if not longer. As such, the difference is calculated on Total Income, line 150 of your tax returns. In your case, you are looking at a difference of $45,000 indicating a split of $22,500 to "equalize" the incomes.. For the higher income earner, any contributions towards spousal support is a tax deduction and for the recipient, the amount would be included in income.

However, this is what the law is. You both can work out something more amicable if this particular arrangement is not acceptable to both of you.

By the way, congratulations on your handling of the Division of Assets and child support issues. Yours is the exception, definitely not the rule.

[billm]

Originally Posted by midnightvampyr

In that you were married for 10 years the present legislation regarding spousal support would dictate that you would be responsible for paying spousal support for at least that long if not longer. As such, the difference is calculated on Total Income, line 150 of your tax returns. In your case, you are looking at a difference of $45,000 indicating a split of $22,500 to "equalize" the incomes.. For the higher income earner, any contributions towards spousal support is a tax deduction and for the recipient, the amount would be included in income.

However, this is what the law is. You both can work out something more amicable if this particular arrangement is not acceptable to both of you.

By the way, congratulations on your handling of the Division of Assets and child support issues. Yours is the exception, definitely not the rule.

This was a hypothetical situation. I was looking for opinion on what you think is fair, not what you would expect to occur from a court settlement.

The 'law' does not dictate SS as you state, it is up to the descretion of the judge, and in that an equal split of the two incomes is seldom, if ever, done as far as I know and have read here.

What is your opinion of a fair agreement for SS in the situation I outlined in my original post?

[midnightvampyr]

Indeed you are correct Bill...the judge can award even more than this including arrears, pensions etc.

However, the spousal support guideline tables have been in the works for years and now most, if not all, law offices have the software that calculates the spousal support as I suggested.

What is fair will be dependent upon the amicability of the split, which is seldom amicable nor fair.

Fairness, unfortunately, has very little to do with it because it would be defined differently by both parties.

[billm]

Originally Posted by midnightvampyr

...
Fairness, unfortunately, has very little to do with it because it would be defined differently by both parties.

One would hope that 'fair is fair', as they say.

Either way, that is what I am looking for, what individuals think is fair in this situation.

What do YOU think is fair (SS amount and for how long) in this exact situation?

[tmcelrea]

In that situation, what I would consider fair is as follows:

1) The child support payments per yer for the greater earner would be $7212 after taxes. Before taxes, lets say its around $13K.

2) 50/50 split of net disposal income would be (90K - 45K - 13K )/2 = $16K. So in theory, the spousal support payment would be around $1300 per month.

The length of time would be negociable but I would suggest 1/2 the marriage so this would run for 5 yrs.