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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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  #1  
Old 09-08-2006, 02:20 AM
gvjt gvjt is offline
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Default Feedback wanted on Separation Agreement

My wife and I were married for 18.5 years and have been separated for about two years. We have not yet divided our equity, worth about $200,000. She has a B.Sc. in Computer Science from 20 years ago and has gone back to school to upgrade her skills and to get certified as a highschool teacher. She will complete her studies at the end of 2007. We have three children 10, 13, and 17. We will be formally divorced before the end of this year in advance of reaching a separation agreement.

Can you comment on the following separation proposal?

1/ I will give her my half of the equity as up-front lump-sum spousal support (equal to 50% of 200K, or in other words, $100,000).
2/ During the first year of separation I contributed $40,000 to her household.
3/ During the past year, I contributed about $30,000 (over 50% of my takehome pay) to her household.
4/ During the first year of divorce I am proposing $34,000 of support
5/ After that, spousal support stops but child support continues until 18yrs of age
6/ no special expenses for the children will be paid (no university tuition, etc.) since that can come out of the equity she has.

Point number 1 above, good or bad, is non negotiable, but given that this particular point is fixed, can you comment on whether the remaining proposal should be attractive or not, fair or not, etc. in that context?

I have no idea about these things, and am trying to put together a reasonable package. Is this, or is it not reasonable, and if not, why not?

Thanks for your feedback.
-gvjt-
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Old 09-27-2006, 11:41 PM
Carson Carson is offline
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It's you last point that I think will be a problem. Once your children turn 18 & do off to univeristy, you have no responsibility to them? How does that seem fair? At least whatever is agreed that you both will contribute should be split proportionately to income. Your kids will not think highly of you if you wash your hands of them once they turn 18.

Just my opinion.
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Old 09-28-2006, 12:51 AM
logicalvelocity logicalvelocity is offline
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gvjt,

One thing to keep in mind is that lump sum spousal support is NOT tax deductible where a monthly periodic payment is.

Previous periodic monthly amounts of paid spousal support would also not be tax deductible against your income unless it was court ordered or a separation agreement was in place prior to any periodic monthly spousal support being paid.

On the face of it, the way you have the proposal structured is that you will be losing out on the tax deductions and advantages for the spousal support obligation which could be a significant amount of money.

If and when the children are of age for post secondary education, I suspect the agreement could be set aside by a court as it would be deemed unreasonable. Remember that child support is the right of the child and this would include section 7 extra-curricular expenses incurred such as post secondary education costs. One party does not have the right to bargain away the children's right to same.

lv
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