Article written by Dena Al-hubaishi
They say that marriage should always be 50/50. But that doesn’t mean both partners have to show up in the same way. While one spouse may provide more financially, the other might do their share by caring for the household or staying home with the kids. In a relationship, it is important to recognize that each person contributes in their own unique way. This is not overlooked in the case of divorce.
While happier days may have found you saying things like, “what’s mine is yours,” just remember that the phrase goes both ways. If you are facing a divorce and concerned about what the future may hold, keep reading for more on how spousal support, child support, and other property division ensures that giving up your marriage doesn’t necessarily mean giving up the lifestyle you once knew. Afterall, in marriage we must remember that “What’s Yours Is Mine.”
Taking a Closer Look at Spousal Support:
In Ontario, the court determines Spousal Support based on a variety of factors. While Spousal Support Advisory Guidelines do exist, in certain more complex cases, the guideline calculations may not adequately account for the unique circumstances. This is especially seen when a person has a higher net worth. To determine the value of spousal support owed, the court will consider both compensatory and non-compensatory factors.
Compensatory support is awarded when one spouse has made significant contributions to the other spouse's career or education, resulting in economic disadvantages or financial dependence. Examples of compensatory factors include:
- Stay-At-Home-Parent. As previously mentioned, just because a spouse doesn’t provide as much financially to the marriage, doesn’t mean they don’t contribute value. If one spouse is primarily focused on homemaking and childcare, this significantly impacts their ability to develop a career or maintain employment. By sacrificing these opportunities, it enables your partner to grow and thrive in their career. This unpaid labour is therefore accounted for when determining spousal support.
- Education and Career Support. This is considered in the case where one spouse supported the other through their education or career advancements, possibly sacrificing their own career opportunities.
- Income Disparity. This is considered when there is a significant difference in income between spouses due to one spouse’s financial support during the relationship.
- Economic Losses. This is considered when one spouse has suffered economic loss as a result of the relationship. This may include giving up job opportunities or assets.
Non-compensatory support (also known as “need based support”) is awarded based on the economic needs of the receiving spouse and the ability of the paying spouse to provide support. Examples include:
- Standard of Living. Building a life together in your marriage means getting used to a specific standard of living. If one spouse is unable to maintain their lifestyle as a result of their separation or divorce, courts will consider this when determining non-compensatory support.
- Economic Disadvantage. This is considered when one spouse faces economic disadvantage as a result of divorce or separation. This may include lower earning capacity or difficulty finding employment.
- Health & Wellbeing. The court will consider the health and wellbeing of a person and how it impacts their ability to support themselves financially.
- Age & Retirement. This is considered when one spouse is significantly older or approaching retirement age and it therefore compromises their ability to support themselves.
Determining Child Support after Divorce:
In the event of a separation or divorce, you are dealing with a rollercoaster of emotions. The one thought at the forefront of your mind is likely your kids. Know that by applying Ontario family law, you and your children will not be left to face the unknown alone.
In Ontario, child support is primarily determined using the Child Support Guidelines. The guidelines provide a formula based on the income of the paying parent and the number of children. However, when the gross annual income of the paying parent exceeds $150,000, the calculations become more complex. In these cases, the court has discretion to deviate from the guideline amount and consider additional factors. This may include the children’s specific needs, the standard of living they were accustomed to, and the means of both parents. The court may also turn to the Federal Child Support Guidelines which provide general guidance for higher income cases. See some factors considered below:
- Financial Means and Needs of both Parents
- Child’s Standard of Living
- Proportionate Share of Child-Related Expenses for Each Parent
- Extraordinary Expenses such as Extracurriculars, Tuition, Medical Costs etc.
- Parenting Time
Dividing Property in Divorce:
When it comes to splitting assets during a divorce, this is when “what’s yours is mine” really applies. The standard process uses equalization. This involves calculating each spouse’s Net Family Properties (NFP) by subtracting their total debts from their total assets as of the date of separation. The difference between each spouse’s NFP is then divided in half to determine an equalization payment to the spouse with the lower NFP. There are other factors to consider. This includes inheritances received during the marriage, property brought into the marriage or funds, investments and other assets that each party held on the date of marriage. This process ensures that both spouses share in the growth of their respective Net Family Properties acquired during their relationship.
In many more complex cases, one spouse may be an entrepreneur. This has the potential to complicate the equalization process. Below are various additional factors that would be considered:
- Business Valuation. The value of the business owned by the entrepreneur spouse needs to be determined. This typically involves engaging a qualified business valuator who can assess the fair market value of the business.
- Income and Earning Capacity. The income generated by the entrepreneur spouse and their future earning capacity may be relevant factors. The court may consider the income generated by the business when assessing the overall financial situation of both spouses.
- Contributions and Efforts. The contributions and efforts made by both spouses during the marriage or cohabitation, including the support provided by the non-entrepreneur spouse to the entrepreneur spouse's business, may be considered.
- Corporate Structures and Shareholdings. The court will examine the structure of the business and any shareholdings to determine if they impact the value of the assets subject to equalization.
- Other Assets and Debts. Besides the business, other assets and debts, such as investments, real estate, and liabilities associated with the business, will also be considered in the asset division.
You Don’t Have to Face Tomorrow Alone:
Facing divorce can come with a lot of fears, particularly the fear of the unknown. Trust that by using expert family lawyers, you won’t have to face tomorrow alone. Wherever your journey may take you, we are here for you.