Do I have to pay Spousal Support?
I hear this question often-or a variation of this question, from clients who are the main financial supporter of their family. And I understand the fear in the question. "Am I going to be able to afford this?" You don't want to sound like a bad person who doesn't recognize the sacrifices your spouse made to their career, nor do you want your kids to notice the financial strain on both households. But you also see the reality. Inflation is rising fast, promotions are slow, and now supporting two households is becoming a nightmare scenario.
With these shifting issues, understanding how spousal support is calculated and how it can be negotiated, is key to working out a better separation agreement.
First, let's start with the good news: spousal support can be negotiable (unlike child support), and in many cases negotiating an appropriate spousal support entitlement can be the key to both parties walking away happy. This is because spousal support is calculated as a range of suggested amounts, over a suggested number of years; rather than a non-negotiable set amount. This leaves space for parties to carefully consider what a fair spousal support entitlement might look like. Some options can include giving-up assets, or payment timelines can be established, or health benefits can be extended, or a lump-sum payment can be decided, and/or property can be moved into the other party's name, etc.
For example, I once had clients who separated after 25 years together. Client A owned their own business, but client B was the main financial supporter and therefore potentially owed spousal support forever. Client A did not want to deal with Client B long-term and though he had a spousal support entitlement that could have been indefinite, his business was subject to equalization, (he opened the business during the marriage and never negotiated a post-nuptial agreement). Both clients knew that they had a solid argument to the other's assets/support. In the end, they decided Client A would keep 100% of his business (a separate business contract was drafted to confirm this), and Client B paid a much smaller, one-time payment of spousal support to client A. Both clients walked away happy, with results that worked for them, rather than what the court would have ordered.
How is Spousal Support Calculated?
The considerations used when calculating the range of spousal support are based on the "Spousal Support Advisory Guidelines." These guidelines address several factors that may be considered when calculating support.
The age of both spouses,
The gross income of both spouses,
The circumstances that lead to the receiver spouse leaving their employment,
If one spouse was a caregiver to children,
The number of years married,
Whether they are retired,
Ability of each spouse to support themselves independently,
The mental and physical health of both spouses; and
If there is a child support obligation. (This can change the range as those without children will have a higher spousal support range, than those who calculate child support first).
The range includes low, midpoint, or high amounts of possible monthly spousal support obligations. These amounts are used as a starting point when it comes to negotiating the appropriate amount for settlement. The "midpoint" amount is not the automatic solution, and neither are the suggested number of years. Instead, parties are meant to use this range to calculate settlement based on the suggested years/amounts.
For example, a monthly range of
Low: $900
Mid: $1200
High: $1500
Suggested Duration: 6-12 years
In this scenario, both parties can negotiate based on these amounts and the number of years for support to be paid. One spouse might offer $1500/month for 6 years, while the other counters with $900 for 12 years. Or one party might offer a one-time payment of $100,000 (approximately $1200 over 7 years), so they don't have to bother with monthly payments. Whatever scenario, parties can negotiate this amount in mediation. The point of this flexibility is to give the parties the space to carefully consider their options and look at the entire picture when negotiating.
When clients are negotiating, I as the mediator am reminding them about how a judge might weigh their issues and arguments. I do this by running multiple scenarios and calculations in mediation to help everyone understand the entire picture. This main difference between court and mediation is why clients are happier and better co-parents post-divorce. Mediation is often where the best solutions are made. Together.
Are you interested in learning more about mediating your divorce? Contact me today at (647) 482-4987 or info@ERFmediation.ca or calendar link.
Disclaimer: The legal information contained in this blog post is for the purposes of sharing legal concepts and general legal information only. This post is NOT legal advice, but rather legal information.
