The payment of spousal support is often a source of conflict at the time of separation. Despite this, consideration of spousal support offers some useful opportunities to negotiate solutions that will benefit both you and your former spouse. In my opinion, it should always be considered together with child support and division of property.
Spousal support can be time limited or indefinite. It can be lump sum or periodical. Unlike child support, periodical spousal support is taxable if you receive it and tax-deductible if you pay it. All this flexibility offers opportunity to income split for tax purposes, and to trade off transfers of assets for a stream of income.
If either of you has substantial income or assets, you should consult your tax advisor and family lawyer to maximize family after-tax income when your issues are resolved.
What the law considers is whether support is payable, how much support should be paid, and how long it should be paid for. The law looks at the needs and means of each person and their ability to pay, and the need to compensate a spouse for the economic disadvantage he or she has suffered as a result of being out of the work force to take care of the family.
Spousal Support Guidelines have been developed by a team of academics. They are not law, but the courts tend to refer to them as a helpful guide to the question of how much support should be paid and for how long.
Spousal support is also payable when a common law relationship breaks up, but there are strict time limits within which to apply after the break up. You should see a family lawyer right away if your common law relationship has ended.
Spousal support is the law’s way of recognizing that marriage is a continuing commitment, and that because people compromise their economic and social condition to enter into a permanent, exclusive relationship, and because spouses are not always economically equal at the breakup, one of them will often need assistance to achieve independence.
Independence and equality are not solely dependent on support. As I will discuss in my next column, spousal support should be considered along with the family’s assets. The end result should be that both of your economic situations will be maximized in the process of settlement.