Need help for a family member

[DunnMom]

I will "try" to explain this the best I can ... I could REALLY use advice as this is involving 2 people I love deeply and I only want what is fair and just for BOTH of them.

If 2 people own a large home (with a mortgage & debt) ... and after figuring out assets/liabilities figure that if they sold they would both come out with approx. $75,000 each.

If the "father" wanted the "mother" to STAY in the home could they draw up an agreement that the $75,000 of his share be "waived" and used to offset child support for "x" number of years ... (ie. he's to pay $1,000/mo in CS so for 75 months he doesn't have to literally "pay" that)?

Is that "legal"? Would a signed agreement by both parties and witnessed work? Would it hold up in court?

TIA

[dinkyface]

I don't see any reason why they couldn't agree on that and make it legal.

A few wrinkles:
- She might not be able to afford staying in the house, especially if she is not receiving any CS cashflow. Typically each party takes a hit on their standard of living ofter splitting, and this is one area where some tough choice needs to be made. Cashflow is an important consideration in this agreement.
- $75K is more valuable now than spread out over 6 years, so it would be reasonable to say that you would pay off maybe $85K over the 6 years.
- His CS obligations may change if his income changes, so think about whether they want to just ignore this, or build in some mechanism i.e. set it up as a loan where monthly CS is a payment against that loan. If his income goes down, CS goes down, and it will take longer to pay off the loan. Gets complicated...

[fieldgrey]

Offsetting support with assets is 'legal', after all it's about liquid cash value. However, for all involved you and the other party should create budgets (in affidavit form) based on income and all expenses under the arrangement to ensure both parties understand the implications. Make sure all expenses are accounted for , now is no time to ignore the details. Any lawyer or judge will want to see a budget that shows a balance in the black, not in the red. Don;t sign off on a budget that shows red.

FG

[marknuck311]

Hoo boy, better get that agreement ironclad - because I could totally see it turn ugly if one side still demands support.....

[HammerDad]

I think she would be better "paying" him the money via grid promissory note ($1000 per month or whatever), which he would offset by his CS payment.

This becomes an issue though as his income increases and his CS obligation increases accordingly. Then the note would have to be adjusted.

And in order for him to properly cover his butt, he should show a flow of monies coming from her to him, and him giving her a cheque back (noted as CS) in an equal amount.

His main concern will be proving he paid cs should after the period lapses and she all the sudden tries to come back and say he owes arrears and he can't prove he actually paid.

[DunnMom]

My concerns exactly HammerDad ....

So can a spreadsheet not come into play stating that say effective say uly 1/11 his CS obligation his $1,000/mo (based on his 2010 NOA) and then every year as of May 1st the spreadsheet be "adjusted" as per his previous years income and basically just keep adjusting CS accordingly to his income until the $75,000 is used up .. therefore he's not actually cutting her a chq each month?

He's aware that based on their incomes he's also responsible for 70% of Section 7 which he agrees to pay.

My concern is that the courts won't recognize his giving her his $75,000 in equalization to offset CS in order for her to remain in the home with the kids. (PS ~ it is a VERY large home and they rent out 4 bedrooms in the basement to college students and that covers the mortgage entirely so it's just utilities that she would have to pay ... which IS a substantial amount due to the size of the home but is likely doable, plus stuff like her car payment/insurance, groceries, etc .. but does "appear" doable.

The alternative of just selling and splitting everything and both parties coming out with $75,000 is not as appealing as that amount gets you squat in the GTA and would likely cause both parties to live in sub-standard housing, etc ..