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Old 04-07-2011, 06:19 PM
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Default Please allow me to introduce myself... with the usual questions on Custody, CS, SS...

This is my first post. My situation is:

- married for 20 years, co-habiting for 25
- 3 kids 18 (in university), 16, and 10
- I am the primary earner - annual income over $150,000, but amounts over $150,000 base are highly variable commissions paid very intermittently
- my job requires me to travel frequently on no fixed schedule - we're talking overnighting in a hotel 60-90 times a year more or less. In effect I am away from home on average 1-2 nights a week over the course of a year
- she's had jobs part time, none at the moment, annual income $10-$20,000
- while she is the primary care giver and whil I am away frequently I have been actively involved in my raising my kids - from decisions on schools, extra curricular activities, running them around to activities, doing groceries, taking the kids around to parties, the library, shopping, etc.
- she turns 50 in a few months

She decided to end the marriage some months ago, and after butting my head against the wall trying to save it, I have accepted that she does not wish to reconcile under any circumstances.

I agreed to move out last weekend. I gather is is an extremely bad idea from a legal perspective without a separation agreement in placde especially as regards to custody.

I have a lot of questions but they mostly revolve around shared custody, child support payments and spousal support, and their interdependence.

My guiding principle is to ensure that my (ex)wife will have a close to equal amount of net income as I do after all the numbers are crunched, with an appropriate amount of child support on top. her monthly housing expenses (property tax + utilities + house insurance on the fully paid off home) will actually be some $500 or so lower than my initial estimate of my rental+utilities+insurace costs for an apartment.

1. Spousal support appears to be a superior income splitting vehicle since it is tax deductable. If we agree to a large amount of spousal support, is that considered in the calculation of child support?

2. Child support - is this an amount dictated by law? Can it be set to any amount based on mutual agreement between parents? Can we eliminate the children from the calculations as they turn 18? The RESP is fully funded and even based on currrent levels is already capable of delivering $10,000 a year for 4 years to each of the children for post secondary studies - that is approximately 2/3 of current annual costs of university and housing, based on the costs incurred in my eldest's first year.

3. Custody - I see that shared custody (60-40) is one recognized path to reducing child support using the offset method. Would the calculations include spousal support payments as part of my wife's income? If I give her 50% of my base salary do we effectively reduce CS to zero in a shared custody scenario?

Thanks and regards,
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Old 04-07-2011, 07:51 PM
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Heres my opinion. To find child support guidelines as well as case law go to www.canlii.org type in child support guidelines. Read the law!

As per my now doing this and in my opinion:
If you raise the kids over 60% of the time amount of child support you pay...zero.

If you raise the kids between 40 to 60% of the time amount of child support you pay is based on your salary minus her salary 150 -20 equals 130K
Monthly amount is $2283 per month

If you raise the kids between 0% and 40% of the time amount of monthly child support you pay to her based on salary of 150K is $2581.

When you make over $150k is it difficult to nail down the amount.

Amount of additional child care expenses you will pay is I would guess
150 divided by (15 plus 20) or 150/170 which is 88% of total expense.

Kid goes to school you pay 88% of his expense. Kid takes piano lessons you pay 88% of piano lesson etc. on top of your child suport expense. I believe these are referred to as section 7 expenses.

Spousal support I do not think has got anything to do with how the child support is set. The key quesiton is....for instance if you gave her $150,000 per year in spousal support would you still have to pay child support? Or would you still be obliged to pay child support based on a salary of 150K.


That is what income do they use to calculate child support? Your income before spousal support deductions or after spousal support deductions. If I were a betting man, which I am, I would bet that just like the RRSP dedcution when income they calculate your income before the deduction.

Like to say more but got to go.

Of course as with all my posts this is just my opinion and should not be construed as legal advice.
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Old 04-07-2011, 10:32 PM
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Quote:
Originally Posted by holdthemaccountable View Post
...Kid takes piano lessons you pay 88% of piano lesson etc. on top of your child suport expense. I believe these are referred to as section 7 expenses.
...
Small point but piano lessons are not an 'extraordinary expense' for combined income of $170K+. It is not a section 7 expense and is covered by CS.

Section 7 is for medical, dental, and also expenses that are above normal costs for people in that income range.

As for simply dividing up income via SS in a 50/50 parenting situation and then saying CS is not needed (which is obviously true) - I wanted to do something similar (though not exactly the same), and have SS effect CS, BUT both my lawyer and ex's couldn't get their heads around that and simply said that 'CS is based on actual income - period' - so I had do adjust our SS agreement to determine the effect that policy had on it - a pain in the ass. The point is that if someone can say you don't pay CS based on your income, even if it is perfectly reasonable, you may be exposing yourself to risk.
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Old 04-08-2011, 12:56 AM
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Not everyone has lawyers heavily involved, court motions, applications etc. This is just for those who fight over the money and kids. If there is no problem then matters are simple and I believe the simplist way is just put money in her account. If she is hesitant that this will work....well then start tomorrow. Put 3k in her account and say you will do this next on May 8 2011 and every month thereafter. Worried she may not agree to this? Well what have you got to lose? You know your ex is there a good chance she'll go for it?

You don't write it off and she doesn't pay tax on it. simple.

In case it does get nasty in the future you have a record you paid her the money and she has a record she received cash however I would suspect that in most cases it will not get nasty.

However if you must go the other route....
The question is....which income on the income tax form is used when determining child support. If it is the line after deducting spousal support then I suspect if you earn 150K per year and then pay 50K in spousal support then child support is set on your income of 100K (ie 150 minus 50). If the deduction for spousal support comes after the line on the tax form that is used to determine child support then....pay 50K in spousal and pay child support based on 150K.

To find the answer to this read the child support guidelines. This will tell you if spousal support is deducted from earnings before or after the figure that is used to be your income for child support purposes. This will not be a "mystery" nor is it difficult to find out. If you can read you can find out in about an hour or two. Sit down on a Friday evening for about an hour and read the Guidelines which I believe discuss how income for child support purposes is set. If I had a couple of hours to read the quidelines I would know the answer but at the moment I don't have the time at the moment.

As far as I know what cannot be done is....

Earn 150K. As per guidelines pay $30900 per year in child support (ie 2591/mth) (of course you can't deduct this but it is tax free for her) but instead pay ex-wife 50,000 and then pay 0 in child support. That ain't happening. What I believe would happen is
a)pay her 50K ss
b)pay income tax on (150K minus 50Kss) which is 100K
c)pay child suport based on income of 150K or approx. 31K per year

She would then get 31K cs tax free income, 50K ss taxable income. I think this would be equivalent to a salary of about 85K per year without working. As she currently makes 20K per year this would be equivalent to a 100K per year salary. ie she pockets about 80K after tax.

You take home about 40K after tax. Ie 150k minus 50K spousal. Income 100K
Tax on 100K about 30K. 70K minus 30k child support 40K left in take home.

___________________________________

Want her to have take home as much cash as you? Here is one way.

Pay her 30K child support based on 150K salary.
Pay her 20K ss.

Your tax on 130K (150K minus 20K ss) is about 40K. Take home 90K. Less cc of 30K. Your final take home is 60K

She has 20k salary plus 20ss. Tax on 40K is 6K. Take home 34K plus 30K child support or 64K.

Close enough. If not give her 17K ss.

Kids and turning 18. If you both agree to it just put in the agreement that child support will cease when the kids turn 18. Simple.

Can child support be any amount? Yes if this is arranged not through the courts but mutually by parents. There are several ways for this. One. If you have a court order that says you are to pay your ex $4 per month in child support yet you both agree that this is not required simply don't pay and there is no problem. No one will get in trouble if neither one complains to the court. Just don't have the order through the Family Responsibility office (FRO). You can put in your court order that payments are not through FRO. Just like if I have a contract to buy a car from someone and make month payments of $4 per month. If after we have signed the contract if we email one another and mutally agree that I need not pay the money then there is no problem. I simply don't pay and that is it.

Other ways to do things. Simply sever the divorce from everything else and forget about all the other stuff. Get divorced and then just give her money whenever. If you both agree to the amounts then just deposit it in her bank account. No problem.

Child support guidelines can be found at www.canlii.org and type in child support guidelines. Scan down and the tables are there as to how much you pay per salary and also I believe what can be deducted from income prior to assessing income for child support purposes.

Of course this is all just my opinion and should not be construed as legal advice.
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Old 04-08-2011, 04:32 PM
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Thanks for the responses so fare. What I'm hearing is that if we mutually agree on an arrangement she and I can agree to waive child support. The key is that we mutially agree and do not go through the courts.

In the general income tax for SS comes after line 150 - so CS is determined before SS deductions.
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Old 04-08-2011, 09:55 PM
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Quote:
Originally Posted by samej View Post
Thanks for the responses so fare. What I'm hearing is that if we mutually agree on an arrangement she and I can agree to waive child support. The key is that we mutially agree and do not go through the courts.

In the general income tax for SS comes after line 150 - so CS is determined before SS deductions.
Neither of you can waive CS. It's the right of the children, and not up to either parent to give up. At any time in the future, this can be revisited in front of a judge, and a whole lot of arrears may be due if none has ever been recorded as paid. But since this is an agreement you two are mainly forging yourselves from the sounds of it, you can do things in whatever order you like. I would suggest that in the matter of support, you pay her table child support amounts, include that in her income and remove it from yours, and THEN use the resulting incomes to determine how much spousal support you may pay her. The end result is that you are paying both child support in the table amount, and some spousal support. And you are not required to aim for your ex to have an identical income as you after all is calculated. It will be brought closer than not paying spousal support would be, but she will be expected to earn income of her own now as well instead of just freeloading off you. And at some point, you'll want to taper off and ultimately end child support, or start paying the kids directly as they move out and go off to University. It's awfully hard to end something that you aren't recorded as having been doing in the first place. By the time your children are grown up and don't need child support any longer, your ex has had plenty of time to anticipate the drop in income, retrain, heck, earn a degree, and been able to enter the workforce, or possibly even find a new spouse. Child support ends, but spousal support, in your case, is likely to be lifetime.

BUT

Don't let your emotions cloud your judgment. You are going through a very stressful time right now, you are bewildered by the turn of events, probably heartbroken, and feel your family and future has been torn from you. I know you are blindsided and still love her and want the best for her, but stick with impartial fairness until you can get through the initial clouded judgment. From what you described (although it may just be that the amounts of money you are talking about are entirely foreign concepts to me, lol) it sounds like you are basically just handing her all your income so her life doesn't have to change at all, while you will reside in an apartment with whatever is leftover. Don't do that to yourself. Not only is it completely unfair to yourself right now in your time of upheaval, it's going to lead to bitterness and resentment later on once you have your head on straighter again.

In a separation/divorce situation, both former spouses suffer a drop in standard of living. It's the natural result of needing two households where before you had one, and it's the fairest thing to do. You might need to sell the house you have now (depending how equalization goes) in order to afford two smaller, equivalent homes each. From the sounds of it, you want to be a 50-50 dad, which is best for your kids, so you are going to need a home where your children can stay comfortably half the time, and she will as well. Heck, you can afford to keep the current home for the kids, each of you gets a little apartment, and you take turns living in the kids' home with them, shared parenting.

Which is my next point. Don't just give up primary custody to her. Your youngest child is ten, so there's no reason she has to be a stay at home mom any longer, especially now that she's going to be on her own. So if you're both going to be employed, you may as well both raise the children equally. It sounds like you could probably negotiate a custody schedule that fits your overnight work schedule, especially if you get a lot of notice about when these overnights will be. Your children are old enough to be flexible with a fairly random schedule, as long as you and your ex coordinate well. Your child support would go down a smidge as well, due to the offset method kicking in with 50-50, though from the sounds of it, you would increase the spousal support accordingly.

And another point: yes, moving out of the home is bad bad bad! You have as much right to be there as she does. She's the one choosing to end the relationship, so frankly, I think she should be the one to move out. You moving out gives her a lot of power over how things turn out. So tell her you'll set her up with an apartment right now if she wants to live under a different roof that badly and she can come back and stay with the kids when you have those overnights for work. If you avoid moving out until you have a separation agreement, it can really hasten the process of having it drawn up!

I know it's probably unfathomable to you right now, but who knows how long she has been considering and planning this. She has had the opportunity to have done a lot more research than you. Don't make these decisions from the weaker position.

Wow, that took a lot of words for me to say not to sign an agreement that waives child support. But don't.

Last edited by Rioe; 04-08-2011 at 10:03 PM. Reason: too wordy. Really! This is better!
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Old 04-09-2011, 09:20 AM
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Thanks Rioe. I think am actually at the acceptance phase of the separation - not fighting it, all the anger that came from resisting it is (mostly) gone and well under control.

We had a frank open and yes - friendly - chat about the what is essentially the basic principles I want to negotiate on, and she says she is in agreement.

1. The children come first. They should see both she and I as coming out of this equally financially and emotionally, and any unreasonable terms on finances or access jeopardize this.

2. Custody is joint and access is flexible. If we try to work in 40% access for Shared Custody it would impact my flexibility in performing my job - it's possible, but we need to discuss in more detail. Shared should not be necessary if we both abide by the terms of agreement.

3. An initial goal for equal disposable income based on my base salary under the most efficient tax vehicle - Spousal Support. Ongoing two way dialog on changes in income and status should adjustments need to be made.

4. No waiver of rights to seek redress in courts should either party not act in good faith (sword of Damocles on both access and support). The agreement would be voided should either party take this avenue.

The numbers being discussed after tax is very close to child support guidelines and the guidelines of 40-47% split of remaining net disposable income. A minimum wage job 30-40 hours per week would put her household income in the $90,000-100,000 range. Under a separation she'd have gold plated medical and dental coverage for her and the kids under my plan - so zero medical expenses in her budget (yes, even orthodontics). The kids are old enough that child care expenses are not a consideration.

Formal Divorce - a likely step near retirement in order to equalize CPP credits.

We'll run this past a mediator and yes, we'll both vet this with separate lawyers as well to make sure we forge a valid Separation Sgreement but we'll both insist on minimal terms and conditions. Again - do I trust her and does she trust me regarding money - the answer seems to be yes - it's never been an issue between us.

The Ontario Family Law act under section III Support Obligations appears to indicate that:

Under "Order for Support section 33" the courst MAY ON APPLICATION order aperson to provide support" indicates that the courts will not be involved in support unless there is an application.... one of the grounds is "Setting Aside Domestic Contract" (4) if there is a default in payment of support under the contract. I beleive the SA w're considering is a "Domestic Contract".

Application of Guidelines Subsection (12) exception:special provisions (a) that special provisions in an order or a written agreement respecting the financial obligations of the parents, or the division or transfer of their property, directly or indirectly benefit a child, or that special provisions have otherwise been made for the benefit of a child;

(14)(a) and (15) deal with Reasons and Reasonable Arrangements and seem to indicate that what we are considering would apply, given that the agreement being discussed appears to be within the realm of court ordered support.
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Old 04-12-2011, 02:31 PM
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Here is a quick thought. If you are home roughly 270 our of 365 days per year then why don't you live in the house and the kids go their Moms on the 90 days you are away?

This will make things much easier for her and will free up time for her.
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Old 04-13-2011, 10:00 AM
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Quote:
Originally Posted by holdthemaccountable View Post
Here is a quick thought. If you are home roughly 270 our of 365 days per year then why don't you live in the house and the kids go their Moms on the 90 days you are away?

This will make things much easier for her and will free up time for her.
As attractive as that sounds it's not really feasible - a core component for her leaving is to be independent from me. Having me dictate a flexible custody/access schedule would likely not fly. Still, I love the proposal as an emotional exercise. Although I accept we're separating and I cannot change that just putting this to her as a mental exercise may let her emphathize with how this separation is affecting me relative to the children.
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Old 04-13-2011, 03:34 PM
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"So tell her you'll set her up with an apartment right now if she wants to live under a different roof that badly and she can come back and stay with the kids when you have those overnights for work."
Are you serious???? What kind of situation would that be? Staying overnight with the children on those nights when dad is outworking???
This souhds like a ridiculous proposal. We separate to be independant and stay separated, not to stay in each oather's house on specific days! We separate and wantt o move on withour lives...not share them a few nights a week!
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