12 Sep Do I have to keep saying no to my kids?


One of my clients described how her son was afraid to tell her that he’d outgrown his running shoes. Another said her daughter declined invitations to go to the movies with her friends because she didn’t want to have to ask for movie money. Kids understand the financial changes that occur after divorce.

How can you make ends meet and maintain your family’s lifestyle if your income after divorce is insufficient?

Child support payments are not intended to cover all costs associated with raising a child, and often fall far short. They take into account the cost of food, housing, and clothing. But they do not cover a range of other expenses from after school activities like music lessons or sport lessons to vacations, or cell phones to school supplies. These expenses rise significantly as children get older. Does everyone under the age of 18 really have an I-Phone?

The first thing to do, whether you’re contemplating divorce or are in the process of divorcing, is quantify how much your lifestyle truly costs. As a divorce financial professional, I help clients put together projected budgets. It’s important to account for as many details as possible:  the cost of summer camp, rep hockey, tutoring, a computer the child will need for school in later years.

Then we weigh these financial needs against a couple’s ability to pay. Does the family income cover this budget plus a reasonable amount for the non-custodial parent?  If not, can a division of marital assets help supplement the difference? Can we scale back to a bare-bones budget? Can we distinguish between wants and needs?

In divorce, financial support comes from 4 sources: Employment Income, Child support, Division of marital assets, spousal support. Each of these sources has different tax and financial consequences.  Yet because household spending on adults and children is intertwined, all three can contribute to a child’s financial welfare.

I work with clients to look at the financial and tax implications of proposed child support and spousal support payments along with the proposed division of marital assets.  I use software to project the short and long-term impact of a proposed divorce settlement. These projections can be really powerful.


What if you’re already divorced and find that you can’t make ends meet,  a financial planner specializing in divorce can work with you to put together a saving and spending plan and help give you a holistic picture of your finances.

Wouldn’t it be nice to say “yes” to your kids once again?


Image courtesy of FreeDigitalPhotos.net

20 Mar I Owe What in Income Tax?!?


Tax (Photo credit: Images_of_Money)

If 2011 was the year you signed your separation agreement and Spousal Support  payments were part of your agreement,  you should   get professional help when  filing your taxes  this time around .

The spouse who pays support is entitled to claim the amount of the payments as a deduction against his or her income tax. The receiving spouse is consequently obliged to claim the support he or she has received as taxable income on his or her tax return. If he/she is working, the amount received in spousal support must be added to his/her employment income. The payee will be taxed on his/her total income, including support payments.

To ensure you can make this deduction, your separation agreement, which obliges the payer to make the spousal support payments, must clearly state that the payments are for spousal support. Without this clear statement, the federal Income Tax Act requires the payments to be treated as child support payments, which are not tax deductible. Also, they are they not reportable as taxable income in the hands of the payee (your former spouse and partner).

You need to track these payments on your own.  If you are the receiving  spousal support payments, don’t assume you’ll be getting any official  ”tax slip” like a  T4 or T3 that confirms these payments.

I can calculate your estimated tax payable if your receiving spousal support  payments  or amount of tax deducted if you are paying spousal support.  If you are  receiving support I can provide some strategies for  saving and reducing the tax bill .

You don’t want to have any  surprises come next tax season!