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There are several things a person can do that not only are prudent financially, but may also be prudent in planning for a divorce.
Different sorts of investments have different rates of returns. For instance, generally, GICs earn more than bonds, which earn more than stocks. By shifting assets from high-return investments to low-return investments, a person can reduce his or her income. This may well be prudent financial planning in an era of low interest rates and high stock market returns.
Being paid in stock options is beneficial to both a company and an employee. The company can pay a lower salary and align the employee’s incentives to support the company’s goals. The employee can end up earning significantly more with stock options if the company does well, than he or she could earn as a salary. However, stock options are not included in income for child support or spousal support purposes.
The characteristic of a tax shelter is that it loses money, but generates tax savings larger than the loss. So, even though your income for child support and spousal support purposes is lower, your net income is higher.
In examining divorce planning issues, a court will look at many factors, including the business purpose of the transaction. As well, the timing of the transaction is important: if it occurs around the date of separation, the court may suspect an improper motive.