Planning on leaving

[thebullies]

We have been living common law for over 12 years. She has the house in her name we bought 8 years ago and makes all of the payments for our living expenses. She makes about 500,000 per year and I make about 80,000. The house was bought for 480,000 and is now worth about 1.2 million.

I want to leave and will be shortly. Approximately what am I able to get upon leaving?

[logicalvelocity]

the bullies,

If you are in Ontario, and if you lived continuously for a period of at least 3 years, you may be entitled to spousal support in consideration of the disparity in incomes. I suspect you not entitled to the home as it appears to owned by the other party and they are paying for the upkeep payment utilities etc. However, you may be entitled to an unjust enrichment claim. Your situation appears to be complex on this issue alone and I would take an hour and speak to a good lawyer such as Jeff and have all your options explained to you.

lv

[thebullies]

Want to be fair

I do not want to take her to the cleaners by any means. I was just thinking a lump of 200,000 would be a good deal for her to close this chapter in our lives. Am I way out of line with that figure?

[logicalvelocity]

thebullies,

on what grounds do you assert that your entiled to a lump sum sum of 200K?

Lump sum spousal support?

or just a lump sum payout that for 200K you will provide a waiver without a complte discharge from any future claims against the party.

lv

[thebullies]

Lump sum spousal support. Rather than payments over time.

[logicalvelocity]

thebullies,

The problem with lump sum spousal support is that it is NOT tax deductible where as a monthly periodic amount would be. This issue alone is grounds to contest lump sum spousal support. Not only would the party incur the lump sum, they would incur the full tax liability on same. With that said, the 200K might turn out to be 300K to the party. I suspect they would contest it highly. Moreover a lump sum would be tax free to yourself.

I have to ask, Are you in Ontario?

lv

[thebullies]

Yes I am in Ontario.

[logicalvelocity]

thebullies,

I suspect you will have a resistance to to 200K amount lump sum. The tax advantages are at stake which is significant.

Have you spoken to the other party at all on this and got an idea where you stand.

lv

[thebullies]

Not at this point. I just figured that with such a huge discrepancy in incomes that she would have to pay something and it would be easier to get it out of the way upfront. I was not aware of the tax implications. Can you not settle something without going to court or using lawyers? If we came up with an agreement and she pays me how do we get it taxed in my hands instead of hers?

[logicalvelocity]

thebullies,

yes you settle you affairs out of court by menas of a separation agreement.

FOr spousal support puposes though, all lump sum spousal support is NOT tax dedctible where as monthly periodic payment is.

Morever, to receive the tax advantages, the spousal support monthly periodic payment has to be under court order or a result of a separation agreement.

See the CCRA site on taxation issues in regards to spousal support

http://www.cra-arc.gc.ca/tax/individ...20/menu-e.html

http://www.cra-arc.gc.ca/tax/individ...28/menu-e.html

lv

[thebullies]

So a simple separation agreement is not sufficient? Or is it and then it just needs to be signed off on so to speak by the courts?

[logicalvelocity]

Separtion agreement is a good way to go if both parties are in agreement. It is cheaper to agree than litigate.

lv