RRSP Withdrawl

[stressfultimes]

Thank you to anyone that can provide guidance here.

My ex and I have spent a fotune on legal fee's (for nothing in my opinion). I am the bread winner, make about 100k and my ex earns about 40k.

My ex's mother is paying for all of her legal fee's, I am paying for all of mine on my own while still juggling paying my proportionate share of the household expenses we own + paying to rent a basement apartment for myself.

I won't be paid for any other deals this year and I am out of $$, so is my ex. We still have to cover our bills for the next two months + make a nice xmas for my son.

My wife and I have agreed to talk about a temporary solution tonight, one of which is the idea of one or both of us withdrawing some RRSP's.

Does this have any negative implications for me? I.e. increasing my income for support purposes etc?

[HammerDad]

Why aren't you residing in the matrimonial home? ie. restraining order an order for exclusive possession by the ex?

Is there an order/agreement requiring you to continue paying a portion of the bills in the matrimonial home?

I don't know if there will be any implacations should you pull some RRSP's, but I would think it is likely...or if anything....only bad things could come if you did..

Anyway, the easiest way to minimize some of these expenses would be to move back into the house, take over a spare room and then you wouldn't have to worry about the apartment and its expense. If that isn't an option, outside of maybe continuing to pay your share of the mortgage to avoid your credit getting Fubar'ed, I cease paying for utilities etc for the house, unless otherwise ordered. You don't live there and your obligation is only to pay c/s for the child's portion of the expenses (again, unless otherwise ordered/agreed).

[Tayken]

Thank you to anyone that can provide guidance here.

My ex and I have spent a fotune on legal fee's (for nothing in my opinion). I am the bread winner, make about 100k and my ex earns about 40k.

My ex's mother is paying for all of her legal fee's, I am paying for all of mine on my own while still juggling paying my proportionate share of the household expenses we own + paying to rent a basement apartment for myself.

I won't be paid for any other deals this year and I am out of $$, so is my ex. We still have to cover our bills for the next two months + make a nice xmas for my son.

My wife and I have agreed to talk about a temporary solution tonight, one of which is the idea of one or both of us withdrawing some RRSP's.

Does this have any negative implications for me? I.e. increasing my income for support purposes etc?

How to save money in Family Law for roughly $38.80:

1. Stop the fighting through lawyers and letting them bleed you dry. (Free)
2. Buy $10 worth of gas and drive to Chapters.
3. Purchase 2 copies of the book "Tug Of War" for $28.80.
4. Give a copy to the mother and keep a copy for yourself.
5. Agree that you both will read the book and write a 4 page essay on what you learned about the book. (Free)
6. Exchange each other's essays and then read each other's essays to see what the other parent learned. (Free)
7. You both COMPROMISE. (Free)

Good Luck!
Tayken

[shellshocked22]

It MIGHT. RRSP withdrawals count as "taxable income" which of course influences support payments. As I understand it, the guidelines are "grey". If its a "one time" withdrawal you "might" not get your income for support purposed boosted by it. However, if you show a pattern of withdrawing on a somewhat consistent basis you'll likely have it included in income for support purposes which makes your payments even higher.

Yes, I know its insane and a classic catch 22 - welcome to the living hell of Family Law in Canada !

Perhaps consider you BOTH take out an equal amount of RRSPs (so any difference in income is "washed out" and/or you both agree (in writing in SA) that any RRSPs withdraws from either one of you will NOT count as income for support payment purposes.

[Mess]

IF you are co-operating, you can transfer RRSP to the lower earning spouse and this will be taxed at a lower rate (depending on the income discrepancy.)

This is the only way to minimize the taxation that I know of, in terms of the scenario you presented.

[stressfultimes]

My fears are many, but here are a few....

1. I have maintained more than my proportionate share of the household expenses. I was told I had to do this to maintain status quo. Now there is no money left but I have had more excess $$$ than her over the past 9 months since we separated. My ex has offered to take money out of her RRSP's, my concern is that if I don't too, it makes me look bad.

2. I am concerned that by paying my proportionate share, this may be viewed as SS.

3. I am concerned that they may come back and say that I was required to pay my proportionate share of all the expenses + pay CS and SS. I sort of think it should be considered one or the other, not both.

4. I have tried to explain to my ex that the lawyer route is ridiculous, we agree to everything but ss. She will not listen, my ex is the type of person that is not willing to do her own thinking....she feels that's what she hired the lawyer for. She has spent 10k over 9 months and we're no further ahead.

5. I haven't left the house completely, I stay there on weekends when my ex is away and the occasional night during the week. I was willing to do the basement apartment to keep the peace for my son and to set precedence for shared custoday(spend more than 45% of my time with my son)

Comments?

[stressfultimes]

Basically, our mutual bills are about 50k for the year. I have put 37k of my 70k (after tax and paying my assistant) into our joint account.

[dad2bandm]

I would not put anything into a joint account, since you are splitting. You can still pay your share of bills, but keeping money in your own name. Does she do the same?

I'd be leery of said money dissapearing from the account, at some point, over a disagreement or such. I would say the same to her, if she was posting here.

[HammerDad]

Since you still stay there on occassion, I can see some logic for continuing to pay some bills. Otherwise, I'd ask who told you that you should continue to pay your proportional share of the bills as it sounds like you don't have a lawyer. If it was her lawyer, there is a rule - one should never take advice from the ex or their lawyer as it will never be unbiased.

If you are only continuing to do this for the next 2-3 months until you've got this finalized, then maybe I can see some logic in it. How long have you guys been sharing parenting time? Is there anything in writing about the parenting time? If you have status quo or something in writing about parenting time, I'd send the ex registered letter stating that in 2 months you will cease contributing to the household expenses outside of the mortgage. State that you will start paying offset c/s in accordance with the guideline numbers for the child. I'd then start exercising my parenting time at the new apartment.

That is unless you are doing the nesting arrangement for some (expensive) reason and your parenting time hinges on you exercising it at the house....which is bad.....nesting arrangements are unnecessarily expensive and generally don't work long term. I'd look to exercise my parenting time elsewhere as it will likely be that way soon enough.

[stressfultimes]

I did this but it just fueled the fire. My ex and I agree on shared custody and I have my son about 45% of the time. The arguement she has is that the offset method does not apply because of our income gap and after reading this, she believes she's right now more than ever!

[HammerDad]

I did this but it just fueled the fire. My ex and I agree on shared custody and I have my son about 45% of the time. The arguement she has is that the offset method does not apply because of our income gap and after reading this, she believes she's right now more than ever!

Of course she doesn't believe the off-set method should apply, because it doesn't benefit her.

Unless she can quote you the section from the Family Law Act or caselaw on point with her assertion, off set does apply. And while there is a difference in incomes, it isnt like you are earning $1million and she is $40k....it is a $60k difference. She earns close to 30% of the grosse family income.

Without offset you'd pay $880 a month in c/s. With offset you should be paying $520. That puts her income into about 33% of the grosse family income. You will likely have to pay some spousal support given the difference in income. I made a bunch of assumptions, and using your incomes, mysupportcalculator determined that:

Child Support

- CSG Table Amount
Self pays Spouse child support of $520 per month , as a starting point subject to further adjustments, according to the Child Support Guidelines ("CSG").
Child Support - CSG Special Expenses
In addition to the CSG Table Amount above, the parties must both contribute to the children’s Special Expenses (eg. child care, medical expenses, extraordinary educational expenses, post-secondary expenses, and extraordinary extra-curricular activities), if any. The amount of each party’s contribution depends on a comparison of the parties' incomes; the party with more income will pay a larger share of the Special Expenses.
Spousal Support - SSAG
If entitlement to spousal support is established, in addition to any child support to be paid by either party above, Self pays Spouse spousal support in an amount to be determined between $734 and $1,532 per month (with a midpoint of $1,098 per month) for a period to be determined between 5 to 11 years from the date of separation, according to the Spousal Support Advisory Guidelines ("SSAG") - "With Child Support" Formula.

Monthly payments of spousal support are taxable to the recipient and tax deductible to the payor, if made pursuant to a written separation agreement or court order.

SS is generally payable for 0.5 to 1 year for each year of marriage. She will first have to prove entitlement, but I have a feeling she will likely receive it....you can negotiate this though, and try to work to a number and length you are comfortable with.

But the offset c/s is pretty well set in stone unless you have a judge who doesn't believe in it.

[dinkyface]

The argument she has is that the offset method does not apply because of our income gap and after reading this, she believes she's right now more than ever!

I'm sure she'd believe in it even less if there were NO income gap.

[arabian]

I wouldn't touch your RRSPs. These are for your retirement and I can tell you that when you get older they will be very, very important to you.

You are going through a very rough period. Trying to maintain two places has got to be difficult. The home should be sold and until that happens you have as much right to live there as she does (unless there is a risk of physical violence or an extremely 'poisoned' atmosphere).

I think when someone is in possession,albeit temporarily, of the matrimonial home it can drag out too long sometimes. Before you know it the 'resident' becomes the one who calls the shots about disposition. Not necessarily equitable.

I concur with Tayken. Move back in, reduce your personal expenses and force the sale of the home. Maybe once you are back in each other's faces this will move things along nicely.

If the two of you shared an accountant in the past why don't you make an appointment with him for the two of you. Email him the appropriate documentation and legislation regarding CS and SS. He very well might be your cheapest source of logic for a relationship that seems to need some guidance.

I don't think accountants receive training in aggressive lawyer-style negotiation. This might work for the two of you.

Worth a try anyhow. Don't dump the RRSPs.