Equalization Calculation

[FB_]

So say the house was sold. Would the insurance company be on the hook for the reno's again in a new house.

You certainly have an extraordinary case here. It's not just any house. Have you search Canlii for similar cases?


I just checked and here is one you might be interested in.

CanLII - 2012 NSSC 385 (CanLII)

[arabian]

I'm obviously touching on some truth or you wouldn't be so defensive.

Your numbers are interesting:

$200k for renovations for a home worth less than 350k. Paid for by the insurance company. You don't expand upon how the 200k is relevant to equalization. Is the 200k reno considered value added on your behalf?

You say your wife is underemployed yet she bought a condo? She is going to declare personal bankruptcy? How did she swing that one? Where did the money come from for her to get her condo?

You have 30k left in a renovation "fund" from the insurance company. How is that going to be accounted for? How is the 200k put into modifications for your home accounted for in terms of equalization?

Very strange situation - certainly not straightforward.

[dinkyface]

How is the 200k put into modifications for your home accounted for in terms of equalization?

It's insurance settlement, which would have been exempt from equalization, until he ploughed it into the marital home (which it seems he had no choice on).

[DowntroddenDad]

I am not a lawyer, or an accountant. But since my brother was in a near death accident, and had to deal with an insurance company on home renovations, here are my thoughts.

The $200K for renovations, the part that has been spent is a sunk cost. It would have been provided as a one time payment for a purpose. Whether it adds value to the house is moot, it can't be gotten back if you leave. You need to get someone to appraise the house with the modifications, and give you an estimate without the mods. Depending on the conditions from the insurance company you may be able to use the unspent monies to modify your next place. But it would seem unlikely that it would cover it, unless you find a place that has already been modified.

[dinkyface]

You need to get someone to appraise the house with the modifications, and give you an estimate without the mods.

Why would the 'without mods' value be relevant?

[GoDiegoGo]

I'd say your first step is to talk to a few lenders (maybe not your own) to get their take on your plan. Also, find out what they require in terms of appraisals - do they want to do their own (at your cost?). Might avoid doing 2 appraisals.

Thanks dinkyface! I've contacted a bunch of "bad credit, no problem" lenders today. I'm expecting some call backs this evening and tomorrow. That will definitely help clear up a lot.

So say the house was sold. Would the insurance company be on the hook for the reno's again in a new house.

You certainly have an extraordinary case here. It's not just any house. Have you search Canlii for similar cases?


I just checked and here is one you might be interested in.

CanLII - 2012 NSSC 385 (CanLII)

Thanks FB! Great advice on the case laws. I'll keep looking to try and put a bunch together. I already have exclusive possession of the mat home and having young kids help too. This definitely isn't a typical case, more of a human rights issue.

After an accident, the insurance company will do a full report on what it will take to renovate your current home to proper/needed standards (whether you're buying or renting). That's how they come up with an amount/limit. Then it is up to the person to use those funds on current house or new house. This was done on my current house, before separating, so the money is gone and I don't have access to more renovation budget.

Some renovations/modifications can benefit the house, but the majority of people don't want to live a disabled lifestyle. Therefore these reno's don't increase the value, but rather hurt it as everything has to be put back to normal.

My ex is renting a new condo, didn't buy it. Her parents also moved in with her. She's living off of OW, support from 1st husband, and cs/ss from me. Although she is very educated and worked 5 out of 7 year marriage (7 years out of 9 total), she was able to claim zero income and I pay full support.

[GoDiegoGo]

It's insurance settlement, which would have been exempt from equalization, until he ploughed it into the marital home (which it seems he had no choice on).

Settlement is for future care costs and loss of income, which is separate. This would be based on the insurance liability you pick (ie $1M, $2M, etc - which is the most they will pay you offset by what they have already spent before settlement)

This is a completely different budget that an insurance company must do. I have no real control on the amount or anything. They are just responsible to provide for you, whether you need wheelchairs, mobility devices, safety devices, modified home, modified vehicle, etc.) These are "exempt" assets as well, but I believe anything done to the mat home would be the same... although in these cases, usually it ends up hurting the home's value.

[dinkyface]

I've contacted a bunch of "bad credit, no problem" lenders today.

Don't they have crazy interest rates? (or some other catch, like an 'insurance' you are required to buy). For $275K over 25yrs, comparing
2.99% (BMO 5yr closed) vs 6% vs 8%
is
$1300/mo vs $1760/mo vs $2100/mo.

[arabian]

Out of curiosity (simply because I've had extensive renovations done to several homes) what modifications did you do that would add up to 200k?

OW (Ontario Works I assume) certainly is different than things here in Alberta. If the mother of your children was living here she wouldn't qualify for welfare as she is living with her parents, unless of course, the parents are also collecting social welfare. She also would not qualify for assistance if she was receiving SS from her first husband. If she is eligible for SS from you she would also be disqualified. Ontario must be a welfare-collector's haven.

Perhaps you can get a tax benefit that you can carry over from the sale or buy out on your existing house and carry over for when you are purchasing your next house. Interesting.

[hadenough]

GoDiego: so you are paying full table amt cs? For 1 child or 2, and is this through FRO?

Any SS pymts?

Remind us please, what are the ages of your children?

Sounds like the stbx landed in a nice comfy pad (condo) - how did you come to learn this?

[GoDiegoGo]

2 kids, 4&6. SC and motion judge both said ex should have an income imputed, but that they would let trial judge decide. so she has zero income and i pay full cs, plus ss and s.7. I'm paying direct to her while we await FRO to start. Ex's residence is in all the court documents.

[hadenough]

That must be really hard on you

How does she afford the condo? With the CS/SS?

Are the kids in any lessons, they're both still quite young?

[GoDiegoGo]

yes, she receives money (a lot more than me) from ow, her parents, 1st husband, and me. Both kids are in swimming and other activities that I pay 100% for.

[arabian]

Sounds like the kids are doing well which is a good thing. Fortunate there are lots of people contributing to make ends meet. Divorce is a huge adjustment financially. Once you get the equalization/property matters behind you it should help some. Staying child-focused through the whole ordeal would definitely be a challenge.

[hadenough]

OP: according to you, she's raking in the dough and has several income sources. Can you prove that? Do you pay her a lot of CS every month? And FRO has not yet taken over the file?