Tag Archive: financial divorce specialist

1. Financial Disclosure in Family Law

   March 12, 2014 10:16 am Leave a Comment

   

   By Kathryn Jankowski, B.A., CFP, FDS, FCSI

   Chances are, if you are reading this post, you, or a close friend or relative, is going through the divorce process.  Overwhelming ranges of emotions and lack of clarity may be prevalent but add to this the need for the accumulation of all your financial documentation …all this can add to the stress of it all.

   So what do you need to provide to your lawyer or mediator?  Here’s the list:

   1) The last 3 years of tax returns.  Not only that but your Notice of Assessment as well.  Just because you disclose what you thought CRA wanted to know it doesn’t mean your return was assessed as filed.  There may have been some discrepancies as to what CRA has and what you filed.

   2) Pay stubs for the most recent pay periods.  If you get paid bi-weekly then a month’s worth of pay stubs will ensure that all your employer-based savings plans and other employment-related fees are all captured.

   3) Bank Statements.  Some of the bank statement could be in your name, the name of you and your spouse or in a business name.  All that needs to be disclosed as well.

   4) Brokerage Statements.  Or any investment related statements including taxable accounts, Tax-Free Savings Accounts and any registered plans such as Registered Retirement Savings Accounts and Registered Educational Savings Plans.

   5) Credit Card Statements.  This would include Visa, Mastercard as well as any lines of credit.  Also, if you have lines of credit are they secured lines or unsecured?

   6) Statements from pension plans, profit sharing retirement plans, employee share purchase programs and any other employer-driven savings plans.  If you were employed by the same employer before the marriage you might want to seek out what the value of these savings plans were before the nuptials as well.

   7) Real Estate valuations.  I strongly recommend getting an appraiser to do this job.  Not a real estate agent, an appraiser.  This valuation would be for the principle residence as well as any recreational properties or investment properties.

   8) Mortgage Statements.  Term.  Amortization. Mortgage rate.

   9) Insurance.  Both health insurance, even if it is covered by your employer, and life insurance, whether it be a group benefit through an employer or your own personally owned plan.

   10) Business Interests.  If you own your own business all the details of your business must be disclosed such as tax filings (if they are filed separately from your own return) and audited business statements.  Typically, business valuators have to come in to do an assessment as to the value of the business.

   I would advise that you get all this together even before you go see a lawyer…to save time and, potentially, some legal fees.  Keep in mind, too, that there are other experts out there that can help with the disclosure documents….such as a Financial Divorce Specialist.

2. Tax Tips for Separating Spouses

   February 20, 2013 1:40 pm Leave a Comment

   By Bronwen Bruch

   

   Financial Professionals on a Collaborative Team provide expertise around the financial ramifications of separation.

   Since we are approaching tax time, I thought I would provide you with some tax tips.

   1.  Spousal support and your pay cheque: If you are employed and you make spousal support payments, you can ask the Canada Revenue Agency (CRA) to authorize the reduction of the amount of income tax that your employer is deducting from your pay.  Instead of waiting until April of next year for the government to send you a refund cheque, you can have a significantly higher monthly net pay now.  Send a completed Form T1213, Request to Reduce Tax Deductions at Source, to you tax services office.

   2.  Shared Custody and claiming your children on your income tax return:  You may have heard that if you are the payor of child support you are not entitled to claim the Amount for Eligible Dependent (or the old Equivalent to Spouse credit).  This is sometimes true.  However, when there is shared custody and both spouses have sources of income, it may not be the case.  This credit could provide you with a refund of over $2,000 each year, so it would be in your best interests to discuss this with a Financial Divorce Specialist.  And if you find out that you are entitled to claim the Amount for Eligible Dependent for one of your children, you may also be able to claim the Child Amount.

   3. Tax implications when separating spouses divide their assets:  Separating spouses go through a process of dividing their assets.  Listing the values of each of their assets is just the first step int he process.  They also need to take into consideration the tax that would need to be paid if the asset were sold.  For instance, if one spouse kept a house worth $400,000, this would not be equivalent to the other spouse keeping the RRSP’s worth $400,000.  Why?  Because when the RRSP’s are withdrawn, tax has to be paid on them, so in essence, they are worth $400,000 less taxes.  Since taxes are not paid when the house is sold, the house is actually worth more than the RRSP’s.  And to complicate things more, there is the question of what tax rate should be used on the RRSP’s?  There are many more questions around dividing investments or pensions and the tax implications. Again, a Financial Divorce Specialist could guide you through this process.

   Separating clients are served very well when they decide to negotiate a separation agreement the “Collaborative” way.  Collaborative Family Lawyers know the law, and are trained to advocate for their client with a collaborative approach.  Family professionals are called upon for their expertise around parenting plans, and Financial professionals are called upon for their expertise around separation finances.  Collaborative Professionals feel that 3 heads are better than one, and the best part is that the couple are not paying 3 times the cost.  It will often be less than the alternative.  Each member of the Collaborative Team will take on the pieces that they have expertise in.  And the ultimate goals is that the couple and the collaborative professionals will create a quality separation agreement that will serve the couple well in their future separate lives.

   Brownwen Bruch, BMath, CMA, FDS

   Certified Management Accountant
   Financial Divorce Specialist
   Financial Family Mediator
   

   THE TAX MANAGEMENT CENTRE
   14-2530 Sixth Line, Oakville, ON L6H 6W5
   T: 905-257-6528  F: 905-257-4221
   bbruch@taxmanagementcentre.com
   www.taxmanagementcrentre.com

    

    

    

    

    

    

    

3. The Emotional Divorce

   October 3, 2012 11:13 am Leave a Comment

   by Fareen Jamal

   “What separates those who can obtain a smart divorce from those who can’t is this quality of being prepared to move on. They’ve done their mourning, to the extent that mourning is involved. And they have come to recognize that they are not victims. ‘This is what life has to offer. So let’s move on.”

   ~ Jeffery Wilson, cited in Deborah Moskovitch, The Smart Divorce, (Chicago: Chicago Review Press, 2007).

   Often, couples fail to properly address their grief following the breakdown of their relationship and the loss of their marriage. The grief of losing a life shared, your identity as a couple, your security and even your beliefs  If you fail to come to terms with the fact that you are divorcing emotionally from life as you know it, the legal process of divorce can become almost impossible. I have had many a file where the parties’ inability to let go of their anger blinded them from noticing the damage their decades of litigation had on their children and personal lives. They were going through the legal divorce failing to address their emotional divorce.

   Failure to identify this grief and to deal with it constructively can result in a long, arduous and expensive legal process.

   Arnold Schwarzenegger comments on the emotional impact of his divorce from Maria Shriver, after he fathered a love child with the couple’s housekeeper, in his upcoming book, Total Recall: My Unbelievable True Life Story. The New York Daily News revealed that Mr. Schwarzenegger continues to believe that he is in denial and still hopes for a reconciliation with Ms. Shriver.

   Divorcing couples must acknowledge that a divorce can divide assets and liabilities, and arrange for child or spousal support but it cannot punish your spouse for his or her bad behaviour during or after the marriage. It cannot guarantee that your support payments will be made or that access schedules will be smooth and problem-free. It cannot make your spouse change, nor will it return your life to the way it was.

   Collaborative family lawyers recognize and address the grief. Perhaps you need to give yourself a period of mourning. Then focus on how you want your life to look. Create a strong support network and recognize that you are not alone. Professional help through parenting experts, financial specialists and therapists can also help regain control of your life. Collaborative family lawyers routinely draw on other experts to assist in the process.

   As you deal with your grief, it will become easier to make legal decisions that are in your best interest. Divorce with dignity, and move on. And find a process that will support you in doing so.

   Fareen Jamal
   Bales Beall LLP
   2501-1 Adelaide Street East
   Toronto, ON
   M5C 2V9

   Tel:  416-203-4538
   Fax: 416-203-8592
   fjamal@balesbeall.com