Spousal Support and inheritance/cohabitation

[torontonian]

My ex wants a clause that SS will vary when/if:
1. I inherit.
2. Cohabit directly or indirectly ( )
Thoughts?
(long term marriage, 2 grown kids)

PS/ has anyone ever cohabited, gotten a reduced SS then broke up, then asked for the original SS to be reinstated? Just thinking...

[DunnMom]

I'm no lawyer but I'd advise 100% against agreeing to her "wants".

CS will and does vary based on the payor(s) income.

Spousal support is usually based on such things as:

duration of marriage
disparity in incomes during marriage

Let's say you made $80,000/yr on average during your marriage and she was a SAHM ... you're likely on the hook for a hefty "indefinate" SS payment that was set at the time of your separation/divorce.

That should not change, IMO, if in 5 or 10 yrs time your elderly parents pass away and you inherit, nor if you remarry to someone who also earns a good living.

DO NOT AGREE to her "clauses" without THOROUGH legal advice.

[torontonian]

THX - it's actually the other way round, I will be receiving the SS and I will inherit from my side of the family. Ex has nothing coming, parents passed away, we were helping them financially... I do have a lawyer, but it's always good to pre-form an opinion... Thanks for your feedback.

[ddol1]

Innheritance during marriage although to meeet fully the family law act you must keep these funds seperate from all other - at least make very tracable, but meeting th erequirements the inheritance is not sharable with your spouse even when married (ie you get the inheritance while married and divoce a short time later. To get anything after date of seperation that has absolutly nothing to do with income then there is no sharing required because it is not sharable.

[torontonian]

Interesting - does one have to declare the inheritance on line 150 (income) on taxes?

[ddol1]

inheritance is not income. however interest or any other investment profits will fall under the CRA rules for taxation (best way I could think of experessing the taxes part from the cra)

[torontonian]

Attempting to answer myself... It's clear under the CS Guidelines (JP Boyd's BC Family Law Resource: Child Support > The Guidelines
E. Windfalls
Money received from an inheritance, the sale of a house or a lottery win does not count as income under the Guidelines. It may be an asset that the parties each have a right to share in, but it isn't income for the purposes of child support.

Now what about inheritance and Spousal Support? Grey area?? It would be logical to receive reduced SS if I have some money coming to me... but it's a one-time thing... Vary for the year?? Hummm....

[lorlaman]

The interest is an income. If you inherit a sizable amount, you should use it to pay down a mortgage or buy a house. If you invest it and get a return which is added to your income, you will have to share the gravy.

As to the cohabit/marry or anything else, I concur with DunnMom, do not agree with the OP. If there is a material change in circumstances then the OP can take you to court and have the SS adjusted, only if the judge agrees. Keep the OP nose out of your business. Besides, do you have to give the OP copies of your annual assessments? If not, it's none of their concern. I though only the payer submits an annual assessment copy. In my case, I am the payer.

[lorlaman]

From a post response from realitychick;

In today's Globe and Mail:

Top court clamps down on changes to spousal support agreements


Estranged spouses who reach agreement on spousal support will have great difficulty changing the terms in future years, the Supreme Court of Canada said Wednesday.

In a pair of keenly-awaited family law judgments, the court refused to let spouses argue their way out of agreements that had been negotiated and later enshrined within formal court orders.

The court said that spousal support arrangements can only be changed if the spouse who is paying can establish a genuine and significant change in circumstances, such as a serious downturn in their financial status.

Toronto family lawyer Phil Epstein said the decisions accentuate the importance of divorcing couples crafting agreements that are meant to stand the test of time.

“At stressful times following separation, couples sign agreements to end the dispute,” Mr. Epstein said. “But they need to pause and remember that these agreement may bind them for a lifetime. Long-term agreements therefore need change mechanisms that can be utilized to make sure they remain fair.”

The principles of “certainty and finality” are paramount, Mr. Epstein said. “But those principles can create great hardship for the payor if he is unable to get relief when his circumstances actually change.”

Today’s judgments revolved around the need for a former spouse to show that there has been “a material change in circumstances” that would justify altering the original order. The interpretation of material change has been an ongoing pursuit for appellate courts.

The first couple in the first case, identified as L.M.P and L.S., were married in 1988. Shortly afterward, the wife was diagnosed with multiple sclerosis and has never worked outside the home since then.

When they separated in 2002, the couple reached a comprehensive agreement that gave the wife indexed spousal support of $3,688 per month.

However, in 2007, the husband sought a reduction and eventual cancellation of his spousal support obligation on the grounds that he was no longer making as much money and that his ex-wife ought to have sought employment.

The trial judge who heard the husband’s application concluded that the wife was, indeed, able to work outside the home. He ordered a reduction of support leading to its termination in August, 2010. The Ontario Court of Appeal later affirmed the decision, concluding that the wife’s failure to become self-sufficient amounted to a material change in circumstances.

In a 7-0 decision today, the Supreme Court restored the terms of the agreement the couple had reached. It faulted the trial judge and the Court of Appeal for making a determination that the wife had the capacity to work and considering that this amounted to a material change of circumstances.

“Not only was the husband fully aware of her medical condition, he made representations, before and after the separation, to her disability insurer, to pension personnel, and to tax authorities that she was unable to work,” Madam Justice Rosalie Abella and Mr. Justice Marshall Rothstein said.

“His changed position at trial – that she can now work – is both unpalatable and unworthy of serious consideration,” they said.

“The expert evidence was that there has been little or no change in the wife’s medical condition in 19 years. That means that there has been no improvement. It is, in short, the same as when the order was made. And that in turn means that there has been no change, let alone a material one, since the order.”

In the second case, a couple identified only as R.P. and R.C. had married in 1958, separated in 1974 and divorced in 1984.

When they separated, the wife remained in the matrimonial home with their two children. The husband, who owned a file storage company, agreed to pay $1,950 in spousal and child per month.

In 1991, after the children no longer resided with the wife, the husband applied to have his support obligations terminated. A judge ordered that he pay $2,000 per month in spousal support on the basis that his ex-wife had never been able to become financially independent because of her domestic responsibilities.

In 2006, the husband retired and sold the house where he and his second wife lived for $2-million. Two years later, he applied to terminate his spousal support obligation based on the fact that he no longer had employment income, the stock market downturn had caused him to suffer serious losses and he had a son in university.
The husband is now 73. His former wife is 82.

The trial judge who initially heard the case decided that the economic downturn and the husband’s retirement constituted a “material change in circumstances” which justified reducing his spousal support obligation to $1,500 per month.

The Ontario Court of Appeal upheld the decision and ordered that spousal support be gradually reduced and finally terminated in September, 2010.

In today’s decision, the Supreme Court said that a material change in circumstances is one which, “if known at the time, would likely have resulted in different terms to the existing order.”

It said that the husband had failed to bring evidence that he had sold any of his investments, crystallizing his losses, when they declined in value in late 2008.
“He cannot, without more, simply cherry pick a date on which his investments decreased in value to claim that a material change of circumstances has occurred,” the majority said.

Mr. Epstein said that both cases demonstrate the need for separating spouses to obtain experienced legal advice and strong factual evidence.

“The test of material change is hard to meet and was not met in either case because of the failure of the husband to lead sufficient evidence that circumstances had actually changed,” he said. “Had the parties agreed that there would be a review of support in the event of retirement or significant changes in market conditions or economic circumstances, the result might well have been different.”





If you are going to sign something, make it work for you, not against you.

[lorlaman]

From a post response from realitychick;

In today's Globe and Mail:

Top court clamps down on changes to spousal support agreements


Estranged spouses who reach agreement on spousal support will have great difficulty changing the terms in future years, the Supreme Court of Canada said Wednesday.

In a pair of keenly-awaited family law judgments, the court refused to let spouses argue their way out of agreements that had been negotiated and later enshrined within formal court orders.

The court said that spousal support arrangements can only be changed if the spouse who is paying can establish a genuine and significant change in circumstances, such as a serious downturn in their financial status.

Toronto family lawyer Phil Epstein said the decisions accentuate the importance of divorcing couples crafting agreements that are meant to stand the test of time.

“At stressful times following separation, couples sign agreements to end the dispute,” Mr. Epstein said. “But they need to pause and remember that these agreement may bind them for a lifetime. Long-term agreements therefore need change mechanisms that can be utilized to make sure they remain fair.”

The principles of “certainty and finality” are paramount, Mr. Epstein said. “But those principles can create great hardship for the payor if he is unable to get relief when his circumstances actually change.”

Today’s judgments revolved around the need for a former spouse to show that there has been “a material change in circumstances” that would justify altering the original order. The interpretation of material change has been an ongoing pursuit for appellate courts.

The first couple in the first case, identified as L.M.P and L.S., were married in 1988. Shortly afterward, the wife was diagnosed with multiple sclerosis and has never worked outside the home since then.

When they separated in 2002, the couple reached a comprehensive agreement that gave the wife indexed spousal support of $3,688 per month.

However, in 2007, the husband sought a reduction and eventual cancellation of his spousal support obligation on the grounds that he was no longer making as much money and that his ex-wife ought to have sought employment.

The trial judge who heard the husband’s application concluded that the wife was, indeed, able to work outside the home. He ordered a reduction of support leading to its termination in August, 2010. The Ontario Court of Appeal later affirmed the decision, concluding that the wife’s failure to become self-sufficient amounted to a material change in circumstances.

In a 7-0 decision today, the Supreme Court restored the terms of the agreement the couple had reached. It faulted the trial judge and the Court of Appeal for making a determination that the wife had the capacity to work and considering that this amounted to a material change of circumstances.

“Not only was the husband fully aware of her medical condition, he made representations, before and after the separation, to her disability insurer, to pension personnel, and to tax authorities that she was unable to work,” Madam Justice Rosalie Abella and Mr. Justice Marshall Rothstein said.

“His changed position at trial – that she can now work – is both unpalatable and unworthy of serious consideration,” they said.

“The expert evidence was that there has been little or no change in the wife’s medical condition in 19 years. That means that there has been no improvement. It is, in short, the same as when the order was made. And that in turn means that there has been no change, let alone a material one, since the order.”

In the second case, a couple identified only as R.P. and R.C. had married in 1958, separated in 1974 and divorced in 1984.

When they separated, the wife remained in the matrimonial home with their two children. The husband, who owned a file storage company, agreed to pay $1,950 in spousal and child per month.

In 1991, after the children no longer resided with the wife, the husband applied to have his support obligations terminated. A judge ordered that he pay $2,000 per month in spousal support on the basis that his ex-wife had never been able to become financially independent because of her domestic responsibilities.

In 2006, the husband retired and sold the house where he and his second wife lived for $2-million. Two years later, he applied to terminate his spousal support obligation based on the fact that he no longer had employment income, the stock market downturn had caused him to suffer serious losses and he had a son in university.
The husband is now 73. His former wife is 82.

The trial judge who initially heard the case decided that the economic downturn and the husband’s retirement constituted a “material change in circumstances” which justified reducing his spousal support obligation to $1,500 per month.

The Ontario Court of Appeal upheld the decision and ordered that spousal support be gradually reduced and finally terminated in September, 2010.

In today’s decision, the Supreme Court said that a material change in circumstances is one which, “if known at the time, would likely have resulted in different terms to the existing order.”

It said that the husband had failed to bring evidence that he had sold any of his investments, crystallizing his losses, when they declined in value in late 2008.
“He cannot, without more, simply cherry pick a date on which his investments decreased in value to claim that a material change of circumstances has occurred,” the majority said.

Mr. Epstein said that both cases demonstrate the need for separating spouses to obtain experienced legal advice and strong factual evidence.

“The test of material change is hard to meet and was not met in either case because of the failure of the husband to lead sufficient evidence that circumstances had actually changed,” he said. “Had the parties agreed that there would be a review of support in the event of retirement or significant changes in market conditions or economic circumstances, the result might well have been different.”





If you are going to sign something, make it work for you, not against you.

[torontonian]

thx to all posters for your input.