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  • Upcoming inheritance

    I have been separated from my wife for 18 months. She served me divorce papers 3 months ago and will only communicate via her lawyer. We own our home where she currently still resides and my 2 boys aged 19 and 20 have moved out. Asset division should be fairly straight forward but my issue has always been support payments. Divorcemate has estimated me having to pay her between $1000-$1500 per month as i used to earn considerably more than i do now. My net pay now is around $2800/month. My wife`s mother has just died and she is set to inherit around $800000. We were in the process of exchanging financial statements through our lawyers and meeting for mediation. She already has my financial statement but my wife has asked to postpone the meeting due to having to deal with her mothers estate( she is an only child). Is it in my best interests to go along with postponing mediation for now? How much will the inheritance affect the support payments? My other question is selling the home. It is fully paid up so all of my money is tied up in it. She initially was ok to sell the house but now she is showing no interest. She is not maintaining the property so i am concerned about the house value declining. I have been giving her voluntary support payments up until i was served papers and now due to lawyer bills i have stopped paying her for now. Any insight would be greatly appreciated. I live in Victoria B C.

  • #2
    Probate can take 12 - 14 months (check with CRA) so while your ex stands to inherit money she may not see it for quite a while.

    I do not believe the inheritance will have any bearing whatsoever on SS. Your ex still had to pay bills and feed herself.

    One thing you can be sure of is that the inheritance has likely gotten the attention of your wife's lawyer and you can be assured that they will do everything to drag things out now so as to pad their billable hours.

    Provinces have different matrimonial property acts. Check out BC and see when the value of the matrimonial home is (time of actual separation or time of trial). Property in Victoria has sky-rocketed over past few years as you are likely aware.

    I don't believe your spousal support obligations will change and you will ultimately have to pay sooner or later or risk losing your license (should she go through maintenance enforcement). So it's your call. You roll the dice. If I were you I'd try to settle the matter as soon as possible.

    Comment


    • #3
      Thanks for the reply. Yes the lawyer bills are a constant worry and i can see them only getting worse as things drag out. One thing my lawyer did point out and this was before her mom died is that when she does inherit, there is no reason why she can`t invest that money to supplement her income thus reducing the difference in our incomes to almost zero which should cancel out support payments. I can only hope this will be the case.

      Comment


      • #4
        Here is a decision from BC, which change for SS was dismissed as SS was primarily compensatory (using your argument):

        https://www.canlii.org/en/bc/bcsc/do...&resultIndex=4

        Your lawyer might put forward the argument of imputing income based on investment income of the inheritance, however, I believe that because it could be several years before your wife receives the inheritance, and the amount after estate is settled is unknown, this might be best dealt with by way of a review of the SS agreement in the future.

        It really all comes down to whether or not the SS claim is based on compensatory, non-compensatory or needs. Of course, annual exchanges of financial information is imperative.
        Last edited by arabian; 01-03-2016, 10:40 AM.

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        • #5
          it didn't take that long to settle my fathers estate..He and my mother were joint on everything so it was fairly easy. Now I am joint with my mother on everything and in her will I am the beneficiary.

          Have you asked the ex if she wants to buy you out of the house?

          Comment


          • #6
            Be careful of overstating how much she can expect as a yearly return on that investment. These days, one can hope for a measly 5-6% for a moderate portfolio. After taxes and fees and 2% inflation (assuming you are preserving capital), you're then left with 2-3%, or $16k - $24k.

            How old is she? (I.e. if close to retirement, then she might have less success in saying she has to preserve capital)
            Are there any major debts she would pay off using her inheritance? ( ie reducing the invested amount)

            Comment


            • #7
              Thanks for all the replies! My wife is 55 and we carried no debt. The inheritance she gets will be all hers to invest less a small amount to the boys. Hopefully probate should`t take too long. Her name was on most of her Mums accounts and her mums condo was sold back in September, which was in joint names. She got bad advice and took her name off of most of the accounts she had held jointly with her mum thinking i could go after the money or that she would have to declare them on her financial statement. Basically she was trying to hide the money but it would`t have made and difference anyhow i believe. It just means more probate fees for her to pay now. She dosen`t want to keep the house but as everyone has moved out and now her mum has died( even though she said she never liked her mum) the house is the last thing she can hold on to from the past so its probably going to need a court order to get her to sell. From what i have read here it looks unlikely i`m going to get away with paying no support but if at least some of the `windfall` is taken into account i will be able to survive. Arabian, i read the court order you sent a link to and yes there are similarities but he was earning 500k a year and i am earning 50k. She will be sitting on a million plus in assets, that has to be taken into consideration surely, if not then.........wtf?

              Comment


              • #8
                Your wife's inheritance has nothing to do with SS.

                Your wife's inheritance is not part of matrimonial property and therefore not part of equalization. She can give all of the money to charity and/or become a crazy cat lady.

                Probate can be lengthy simply because there are very few people at CRA in the probate department. An estate attorney will advise you as to how long it is taking nowadays. 2 years is not unusual at all even on seemingly straight-forward estates.

                The only way the inheritance might play into things is if SS was purely based on "need."

                As you don't know the details of the estate (money owed by estate) you don't know how much your ex will inherit after everything (including lawyers of course) is finalized.

                If the probate goes through within the next 12 months (unlikely but not impossible) it will be another year before your ex is obligated to report investment income. So I'd estimate that by 2019 you might see a fluctuation in your ex's tax return (based on 2018 investment income).

                With this in mind I think your best option would be to move to a motion to get the matrimonial home sold and equalization performed.

                Check out other cases on CanLii.

                Here is a case from BC Court of Appeal

                https://www.canlii.org/en/bc/bcca/do...resultIndex=34

                Money inherited was deemed not to be a family asset.


                this is an interesting case:

                https://www.canlii.org/en/bc/bcca/do...resultIndex=33


                " Assuming for the moment that Ms. Q.’s entitlement to the house in Calgary and other non-family assets can be analogized to a “windfall”, I agree that where the support is intended to be compensatory, the fact that the receiving spouse has other assets available to her should not affect the amount of compensation."

                I guess this could be interpreted in more ways than one.

                You will have much research to perform.

                Good luck
                Last edited by arabian; 01-04-2016, 01:05 AM.

                Comment


                • #9
                  Your wife's inheritance has nothing to do with SS.
                  It will depend if support is being paid on a compensatory or non-compensatory basis.

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                  • #10
                    Originally posted by OrleansLawyer View Post
                    It will depend if support is being paid on a compensatory or non-compensatory basis.
                    Ok, pardon my ignorance but what is the difference?
                    Thank you for your reply.

                    Comment


                    • #11
                      what is the difference?
                      Compensatory is to compensate, usually for a loss incurred by the recipient (sacrifice of career).

                      Non-compensatory is based on need.

                      Comment


                      • #12
                        Originally posted by OrleansLawyer View Post
                        Compensatory is to compensate, usually for a loss incurred by the recipient (sacrifice of career).

                        Non-compensatory is based on need.
                        Ok Definitely non-compensatory. I paid for her to go back to school 5 years ago to re train as an aesthetician but she can`t find or does not want to find full time work. So she`s needy alright!

                        Comment


                        • #13
                          So just an update. We had a four way mediation last week and signed an agreement. My lawyer went straight on the attack and asked for disclosure of the inheritance. Without disclosing the amount my wife and lawyer accepted 8 months of ss (or sooner if probate is settled) at 2/3 the saag rate(it can be revisited ) and equalization of assets. House to be listed by April 1st and i bought her out of my public pension plan. I feel a little light in the pocket right now but i`m happy with the outcome. Its not all doom and gloom out there. A strong lawyer seems to be the answer.

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                          • #14
                            Is this a "final" agreement or an "interim" agreement?

                            What do you mean "it can be revisited"?

                            Good news about agreeing to list home.

                            If you are happy with the agreement that is a good thing!

                            Comment


                            • #15
                              Originally posted by arabian View Post
                              Is this a "final" agreement or an "interim" agreement?

                              What do you mean "it can be revisited"?

                              Good news about agreeing to list home.

                              If you are happy with the agreement that is a good thing!
                              Yes this is a final agreement. So the wording for spousal support reads:
                              After 8 months- `thereafter spousal support will cease but the Wife will have the liberty to apply for further spousal support'.

                              Her lawyer said to my wife that it would be costly to reapply for further ss beyond the eight months and assuming the house is sold and she has the inheritance difficult to substantiate.

                              Comment

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