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  • Spousal support when wife has a lot of assets

    After searching the Internet for many hours still cannot find an answer for this:
    the couple separated after 20 years of marriage. They have grown-up children. Wife had stayed home for 2 years with each child. Now she is self-sufficient with a 65K salary and over one million in assets (after equalization). She lives alone.
    The husband's salary is over 250K. His lawyer says he shouldn't pay any spousal support while the wife's lawyer advised her that she is entitled to receive it based on the length of the marriage, child care time-off and huge difference in their salaries.

    Which party is right?

  • #2
    Without knowing the details I'd say there might be merit in what the lawyer said.

    Many wealthy individuals have to pay or receive spousal support.

    It certainly isn't cut and dried.

    You would be best to search CanLI for case law.

    One case that I knew of personally in Alberta was Modry v. Modry. Husband wealthy cardiac surgeon. Wife put husband through university. Substantial property/equalization. Wife ended up getting 9900.00/month in SS.

    It goes without saying that you don't pay SS until someone has proven entitlement. It takes more than a long-term marriage to be entitled to SS. Need and ability of payor to pay are also examined.

    Also read up on 'rule of 65'

    Comment


    • #3
      Originally posted by nepenois View Post
      After searching the Internet for many hours still cannot find an answer for this:
      the couple separated after 20 years of marriage. They have grown-up children. Wife had stayed home for 2 years with each child. Now she is self-sufficient with a 65K salary and over one million in assets (after equalization). She lives alone.
      The husband's salary is over 250K. His lawyer says he shouldn't pay any spousal support while the wife's lawyer advised her that she is entitled to receive it based on the length of the marriage, child care time-off and huge difference in their salaries.

      Which party is right?
      Both are. This is typical of family law negotiations. Both parties start quite far apart from one another on purpose. Lawyers tend to encourage this, as the longer things take, the more they can bill. Seeing numbers like this makes them eager to stretch things out.

      Check the spousal support calculator at MySupportCalculator.ca and enter the numbers. See what pops out.

      The wife could argue that she made career sacrifices to help the husband earn his greater income, and she should continue to benefit from that income post-marriage breakdown as this had been the plan had they stayed together. She'll propose the high amount of spousal support, indefinitely. The husband could argue that the wife has an income sufficient to support herself, and her nice equalization should be considered her benefit from the marriage itself. He'll propose zero spousal support or maybe the low end, and for a limited amount of time.

      Then it's all about who has the most eloquent lawyer, who is the most stubborn, and which arguments the judge likes best if they stop negotiating and go to trial. This is a grey area, and could be argued either way, and settlement will probably ultimately be in the middle somewhere.

      The smart thing to do would be for the wife and husband to sit down together, and discuss how much money they want to change hands, and how much they want to pay to lawyers to have someone else decide for them.

      As for the specific part about assets, I'm not sure that enters into spousal support. At marriage breakdown, the assets are presumed to be divided equally. Then, spousal support is looked at separately, based on comparing the two spouses' incomes. I suppose the husband could argue that dividends from investments could bring up the wife's income, if her assets are in that form.

      Comment


      • #4
        I agree with Rioe about the lawyers. This couple have ample amount of money to keep dispute going for years and years. Lawyers love this. Legal bills could easily be in excess of 200k. All the lawyers have to do is go on a 4-way meeting binge.

        Smart money, people who want to retain wealth, settle out of court.

        Comment


        • #5
          Personal budgets come into play in a big way. If the husband or wife have an expensive activity that they have been involved in throughout the marriage, the spousal support award would likely include the activity because the spouse has ability to pay for it. 65k sounds like alot of money but it is fully taxable. Combine it with modest investment income the wife is in a high tax bracket. Ongoing spousal support wouldn't necessarily be the best option for the wife. Lump sum spousal could very well be preferable.

          Comment


          • #6
            Rioe, you described the situation precisely as if you were there! That's exactly what is happening - one lawyer pushes for zero, the other insists on the substantial support, both have strong arguments. My spouse and I want to do things in a civilized way and avoid going to court. Yes, we saw the support calculator numbers but then we were told they are just guidelines, not law-enforced. One more thing the husband is bringing into the picture is that he payed for his wife's professional training when she was unemployed which ultimately brought her career where she is now. Then wife mentions that she is eligible for rule of 65... All in all, we are trying to work it out nicely but no progress so far.

            Comment


            • #7
              Arabian, you're right about the tax bracket. That's another thing to consider. And thanks for mentioning "an expensive activity" during the marriage - that was the case and I didn't know it should be taken into account.

              Comment


              • #8
                Everything is negotiable. Another benefit of not going to trial is privacy. While people's trials are sometimes listed in CanLII using initials, it's usually not too difficult to figure out people's identity. If you are well-known in your business/occupation you might want to give some thought to that as well.

                An interesting subject to think about, particularly if your children are nearing adulthood, is future assistance to adult children. A good friend found herself having to mortgage her home to help her kids buy their own homes. The ex, who made several million a year, had remarried a few times and refused to assist them. My friend said that had they not divorced, financial assistance to the adult children to purchase homes would not have been an issue. She said that many people she had talked to saw her monthly SS award and couldn't comprehend the tax that was payable.

                I know many people would scoff at this and wish they had that problem. That is naive thinking though. Planning for the future is important for everyone, regardless of income.

                Comment


                • #9
                  i am very interested in this conversation. I fit into rule of 65, no kids, worked in my own profession and involved in his practise the day he started it after we married. His medical situation was also taxing and I ran the office while he wassick while maintaining my own job. Promotions missed as a result for me and thus my pay and pension after separation date affected.
                  I am retiring this year.


                  The issues are;

                  a. if he retires---the lawyer says why should he give spousal
                  b. i could have retired in 2009. i have to "prove' i guess, why i shouldn't continue working


                  any thoughts on replies to this

                  Comment


                  • #10
                    Originally posted by nepenois View Post
                    One more thing the husband is bringing into the picture is that he payed for his wife's professional training when she was unemployed which ultimately brought her career where she is now.
                    So the money the husband had was just his money and not hers? Hmm. I think that would be an argument if the wife became successful and the husband then stayed home to raise the children in a traditional role. The couple worked cohesively together so that the wife was able to upgrade her education and go into the work force.

                    The fact that the wife was able, at the end of the marriage, to support herself is very, very important. If the wife has a mortgage free home which doesn't require extensive maintenance or large property tax, then that could be examined. The budget of both husband and wife is extremely important. If one person in the marriage paid all the bills then the other person quite possibly doesn't fully comprehend monthly costs. This is reason why many people end up in court again. If you want to be cooperative and avoid future litigation be sure that you both understand everything.

                    Comment


                    • #11
                      mememe:

                      If you could have retired in 2009 why didn't you?
                      You worked throughout your marriage and maintained your career.

                      Part of the test of receiving SS is showing a need. If you were in a position financially to retire in 2009 it seems to me that you are financially independent.

                      Perhaps read up on compensatory portion of SS.

                      Another part of the test is showing that ex has ability to pay. If he is at retirement age (now that's the big question) and can prove he has means to support himself in his retirement unless he has to pay for compensatory portion of SS I don't believe there would be anything that could prevent this.

                      Retiring or under employing oneself to avoid paying SS is another thing altogether. Income is simply imputed to individuals who do this and unless they can cough up the money they may have to put off their retirement plans.

                      A very interesting subject indeed.

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                      • #12
                        No, we didn't have "his" and 'her' money - all accounts were joint accounts from the beginning of the marriage, all bills were paid from those accounts. While husband had a full time job at all times, the wife entered workforce as a professional in 2000. She held different temporary positions before that date but her wage was much lower that his.

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                        • #13
                          Originally posted by arabian View Post
                          A good friend found herself having to mortgage her home to help her kids buy their own homes.
                          OMG!

                          Comment


                          • #14
                            Originally posted by arabian View Post
                            A good friend found herself having to mortgage her home to help her kids buy their own homes. The ex, who made several million a year, had remarried a few times and refused to assist them. My friend said that had they not divorced, financial assistance to the adult children to purchase homes would not have been an issue. She said that many people she had talked to saw her monthly SS award and couldn't comprehend the tax that was payable.
                            And that right there is why young adults have no idea about money management. It is absolutely ridiculous that that woman did that. What ever happened to children/adults saving their money and buying their own stuff? If you can't afford to purchase a house, then you don't own a house...

                            The husband in that situation was right... he didn't have to help out, even if he was a millionaire.

                            Comment


                            • #15
                              2009 was the year of separation no kids couldn't talk about the situation of separation as we were trying to sell practise so i was isolated

                              work kept me busy social contacts routines set up

                              didn't know how much legal costs would be


                              in questioning--he said he wanted to work ; working 3 days in office i helped build and , as per his own words, would not have had without my involvement.

                              yes i did get half the practise-but my ability to move up in my own profession was compromised so my salary and pension are less than they should have been had i not had the stress of his office and his mental health issues

                              Comment

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