There are two things in Divorce, money and kids.
The issue is that emotions can play havoc with our ability to make sound financial decisions in divorce. Finances & divorce go hand in hand, but mix like oil and water. Kids are most couples number one priority. Grounded parenting discussions and planning is not likely until the money issues are resolved.
While it might seem that parenting should be decided first, this is not the best strategy. First, Deal with money matters. Put in place a short-term parenting plan, while negotiations are ongoing. Even if this seems counter-intuitive — it works much better for a faster, less costly divorce.
Money Matters in Finances & Divorce:
There are two important aspects when it comes to finances & divorce: child support and division of assets. Regardless, whether you are currently getting divorced. Or foresee doing so on the horizon. Here is what you need to know.
The Federal Support Guidelines set out specifically what child support will be. This is based on the incomes (usually starting with line 150 of the T1s) and the number of dependent children. Child support will change depending on whether the parents are sharing 50/50 or some other scenario. If parents are sharing 50/50 then the child support paid will be based on the amount payable by the higher income earner minus the amount payable by the lower-income earner. The difference is then payable to the lower-income earner. If parenting is not close to 50/50 then child support is payable on the income of the non-residential parent. This is regardless of whether they are the lower or higher income earner.
There are many tables available online now. Anyone can access these calculations.
The issue with child support and what can cause arguing is the determination of income. Especially true for self-employed individuals or individuals with other non-T4 income. The other issue that must be determined, commonly known as extraordinary expenses, is the section 7’s. These expenses are those that are above and beyond basic child support and are usually shared pro rata. It is based on incomes and agreed to in advance. Unless otherwise decided.
Usually parties will start with the guidelines than negotiate from there. This is the one area that can cause significant friction between parties. The argument for paying or not paying. The amounts are very much the debate of many negotiations and fights. For just about any case, you should have the help of both highly skilled mediators and lawyers.
The Provincial Property Acts set out the laws around division of property in divorce. The premise across Canada (excluding Quebec) is 50/50 for assets accumulated during the marriage. There are rules applying to pre-marriage exemptions. This can include property, inheritances etc. and is a complex area. Seeking the advice of lawyers and using skilled mediators is important. Ensuring the best possible outcome is achieved for both parties.
The above sets out some very high-level points about the financial aspects of divorce. Decisions made during divorce can impact the rest of your life. You should have all of the information. Take your time. Think everything through.
Contemplate both short-term and long-term implications. Make decisions that are non-emotional and will stand the test of time. Do not use the financial negotiations as the platform for revenge. Also, don’t expect that your ex “needs to pay for their wrong doings.” It will cost you both way too much.
Being careful and methodical will result in the best outcome. Leave the emotions for the counselling sessions. Most importantly, keep the fighting out of the courts.