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Old 03-01-2012, 04:28 PM
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Default Soon to be Separated

I've read the warning about being put in my place and given the real truth, so that's what I'm after....

I've been married for 7 years, have two children aged 5 and 2. I knew way back when, even when we were planning the wedding, that this wasn't right. Unfortunately, a part of my personality is to just make things ok in the quickest and easiest manner. I'm working on making more difficult but better choices and part of that is planning our separation. Things have been a little bitter but we've spoken pretty openly and we seem to be on the same page regarding this. I've been researching the different implications of separation and divorce, but have a couple of financial questions.....

1) My wife makes approximately $8,000 more than me. If I apply for and receive spousal support, does that open up the possibility that the support could be 'flipped' around on me if circumstances change in time?

2) With spousal support, what if a 2nd income enters either her or my household? I assume that would effect the spousal support, but if with a 2nd income entering my household, the collective income of my household is not $20,000 more than her household on her own could she apply to have spousal support reflect that difference?

3) I'm a little tentative to mention or apply for spousal support for a few reasons. I assume this would result in us not being on the same page and therefore potentially headed to court. I also assume this would create bitterness and am afraid this would change her attitude about a custody arrangement of our children. Are these fears appropriate?

4) I may have found the answer to this, but just in case; Does the mother continue to automatically receive the full monthly Child Tax Benefits even with equal joint custody of our children?

5) I'm a little unsure of the tax implications. What happens to the Child Tax Credit with equal joint custody situations? I assume it is divided equally to each parent?

6) My parents have been paying into a Family RESP for our children for a couple of years now and will continue to do so. If our children don't use the money for their education, our portion of the money which my parents contributed will come back to "us". Anyone have any knowledge about what I should do to make sure that this money either goes back to my parents or myself if this is the case in the future? After separation/divorce should I start a new RESP in mine and my kids name? In the separation agreement should I insist on her agreeing to remove her name from the existing RESP?

Thank you SO much for any help with all of my questions. I'm pretty overwhelmed and appreciate any thoughts or assistance.
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Old 03-01-2012, 05:08 PM
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Quote:
Originally Posted by Concerned Dad View Post
1) My wife makes approximately $8,000 more than me. If I apply for and receive spousal support, does that open up the possibility that the support could be 'flipped' around on me if circumstances change in time?
With only an $8k difference, there isn't much likelihood s/s would be awarded. There are various things that must be determined when figuring ss.

Things like entitlement (did you sacrifice your career for the betterment of the house)

Ratio of income vs net family income

and a few other things other people may refer to. But your likelihood of getting ss with just an $8k difference in income is not good.

Quote:
2) With spousal support, what if a 2nd income enters either her or my household? I assume that would effect the spousal support, but if with a 2nd income entering my household, the collective income of my household is not $20,000 more than her household on her own could she apply to have spousal support reflect that difference?
New spouses incomes are irrelevent when determining s/s and c/s unless one spouse is claiming undue hardship or if an ex ceases to work and is supported by their new spouse.
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Old 03-01-2012, 05:41 PM
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Quote:
Originally Posted by Concerned Dad View Post
3) I'm a little tentative to mention or apply for spousal support for a few reasons. I assume this would result in us not being on the same page and therefore potentially headed to court. I also assume this would create bitterness and am afraid this would change her attitude about a custody arrangement of our children. Are these fears appropriate?
When any couple splits up spousal support will lead to at least some bitterness. If both spouses work and there is a comparitively small difference in incomes, then the bitterness and resentment will be 10x and you are looking at a huge conflict. If you can save legal costs, stay amicable, and have a quick settlement, this can be worth far more than the few thousand you might see from spousal. Plus I agree with Hammerdad, the $8k difference in income does not suggest spousal unless there is some other circumstance involved.

Quote:
4) I may have found the answer to this, but just in case; Does the mother continue to automatically receive the full monthly Child Tax Benefits even with equal joint custody of our children?
The mother will continue to receive Child Tax Benefits unless/until Revenue Canada is informed of the change of circumstance. You must file an application for the CTB in order to receive it. If you delay, you can file retroactively; she will owe for the overpayment and will be furious. Been there, done that, got the raging phone calls from the ex. Since you have a lower income, you will receive a larger benefit; your half will be calculated on your income, her half will be calculated on her income. It is in the children's best interest for you to receive half the benefit, presuming you have equal shared parenting.

Quote:
5) I'm a little unsure of the tax implications. What happens to the Child Tax Credit with equal joint custody situations? I assume it is divided equally to each parent?
The "child tax credit" is the same thing as 4) above; I believe you mean the "Eligible Dependent"? This may only be claimed by one parent each tax year. It is ok to alternate years, if you agree. If both parents claim, then both claims will be denied. Since you have two children, I would suggest you decide that you will each claim one child. I would suggest that you write into your separation agreement that when the elder child turns 18, you will then alternate years with the other child. This will save you having to reopen discussion later on, everyone will know what to expect. Another note here, if you each claim one child, this works out better financially all around; one parent claiming two children doesn't double the credit. I either or both of you remarry, or file as common law with a new partner, you will no longer be able to claim the Eligible Dependent. The ideal situation is to stay amicable and clear about all this with each other, and work out the tax implications and file according to the children's best interests, which means maximizing the tax refund between you both each year. Some parents will then split the return.

Quote:
6) My parents have been paying into a Family RESP for our children for a couple of years now and will continue to do so. If our children don't use the money for their education, our portion of the money which my parents contributed will come back to "us". Anyone have any knowledge about what I should do to make sure that this money either goes back to my parents or myself if this is the case in the future? After separation/divorce should I start a new RESP in mine and my kids name? In the separation agreement should I insist on her agreeing to remove her name from the existing RESP?
My understanding is that the unused money would be returned to your parents, although I haven't looked at it lately. When the children go to post-secondary, the usual method applied by the courts is that each parent pays 1/3 and the child pays 1/3. The RESP would be considered to be the child's share, to my understanding. This isn't written in stone in family law, but it is how judge's tend to rule when there is a conflict. Ideally you want to avoid conflict. I would suggest that you come up with a plan that you and your ex can agree on now, have it worded into your separation agreement and then you can make your plans accordingly. [/quote]
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Old 03-02-2012, 04:09 PM
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Thank you so much for your help HammerDad and Mess. Huge help, and the general point of working to keep things amicable, even if that means sacrificing some of my wants is well received.

The spousal support is something I think that in my case should probably just be avoided. I suppose in many situations $8,000 a year isn't alot, but with both of our incomes in the low-middle class and living in an expensive area, even half that amount would be huge. Having said that, that amount of money isn't worth the bitterness it would surely evoke.

I don't understand how remarrying or becoming involved in a common law situation would cause you to not be able to claim a dependant from a previous marriage. I understand that that's just the way it is I suppose, but just doesn't seem right.
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Old 03-02-2012, 04:39 PM
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hey there

first of all - good luck and best wishes! I am in a similar situation.
In my heart I knew I should have said no when he proposed, and 13 years later (10 of them married) here we are.... but with the added bonus of having our two beautiful girls (age 6 & 3)

my STBX husband and I have been able to keep things amicable. His income is about $7K more than mine (both of us are under $50K a year...) I have opted not to pursue SS (a) wouldn't qualify based on a couple online calculators, and (b) it's not worth the hassle!!

Will the kids live with you or her? From what I've read, if you two have "shared custody" as opposed to "sole/joint custody" you will both receive a portion of the CCTB. In my own situation, I will continue to receive the CCTB, but I have also asked him for a CS amount much lower than the Guidelines (a little over half...). It's what worked for us... he still contributes to the kids by buying them clothes/toys... to me that counts as CS over and above the actual money he transfers to me.... We were able to agree very early on that we don't need to make it any harder on the kids than it already is by bickering over money/possessions. We each had to give some of our "wants" but it has been pretty fair and even on both parts. Being able to develop a mature, civil relation with him, where we can talk openly, is by far much more important for the sake of our kids.....

....but that's just my two cents....
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Old 03-07-2012, 09:12 AM
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Wow, cbarker, I wish we had an ex-wife like you in our lives!
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