Strategies for a Friendly and Affordable Separation and/or Divorce

RECOMMENDATIONS

1. Learn about the law.
2. Collect and summarize relevant information using my FREE WORKBOOK.
3. Identify Agreements and disagreements BUT do NOT dwell on disagreements…just identify them! It’s amazing how many of these disagreements simply disappear as individuals work through this collaborative process.
4. Choose your service provider(s). If you live in Alberta, call me (Debbie Ward) at 1-800-320-2477 (or 403-229-2774 in Calgary) for a FREE CONSULTATION.
5. Proceed with your Separation Agreement, Divorce and/or other required service.
6. Consult with a lawyer for legal advice (if applicable).
7. Resolve disagreements.
8. Finalize your Separation Agreement, Divorce and/or other required service.

#1. Do NOT fight about disagreements until the first 7 steps have been completed.

These Instructions help you focus on the process (facts), not the problems (disputes/reasons for marriage breakdown). Focus on the process and be seen as more credible and taken more seriously by your lawyer. You will be well organized and prepared. You will reduce the amount of time spent with a lawyer. You will understand and be in control of your Separation and/or Divorce. You will reduce conflict. You will save hundreds, and possibly thousands of dollars. More importantly, you will gain peace of mind and lessen the impact of marriage breakdown, Separation and Divorce on you, your spouse and your children.

#2. Until you have a fully executed Separation Agreement all Agreements are subject to change.

If you are at all uncomfortable negotiating any kind of Agreement with your spouse, please keep in mind that any Agreement negotiated with your spouse will be reviewed with a lawyer before it is signed. If on that advice you decide you want changes, the Agreement can then be re-negotiated.

No one can be bound by an Agreement until there has been full disclosure, full appreciation for what is being negotiated (which is usually not apparent until a full Agreement has been drafted and a networth statement for each party created), and independent legal advice received.

#3. Recognize that I do NOT represent the bests interests of either party.

I often tell each spouse that I do not represent the best interests of either or both parties. My interest is simply to help the parties with the drafting of an Agreement—which is why they must each take the Agreement to their respective lawyers for review, advice and signing. It is for their protection AND it is for my protection. First, each lawyer will represent their best interests. Secondly, neither party can say that they relied on me in any way for legal advice. I type the Agreement under your direction. I don’t give legal advice. You rely on your lawyers for legal advice. I then incorporate any changes either of you wish, if any, based upon the advice of your lawyers.

We gather the facts (what you acquired in terms of property, assets and debts and how you propose to divide everything); document how you want custody, access and child support worded; and, indicate whether or not there will be spousal support. We discuss the possibility of exemptions. We discuss general procedures to divide property, assets and debts equally (though there may be exceptions were it is not necessary or appropriate to divide equally).

Keep in mind that:

• The parties can agree to deviate from an equal division—they need to consider the law but also have the right to consider situations where it might be appropriate or fair not to follow the letter of the law—to consider circumstances in the relationship which would make it fair to divide in some other manner.
• Perhaps it has always been the desire of both parties to keep some or all assets acquired solely as separate and not to be divided in the event of Separation or Divorce.

We also discuss situations where parties can negotiate trades—such as a waiver of spousal support and/or child support in consideration of an unequal division of matrimonial property. Any negotiated Agreement, whether equal or not, will be reviewed with each of your lawyers. We discuss the fact that I am relying on the parties to provide complete, full and honest disclosure, that the parties may wish to pursue a more formal evaluation and disclosure process with their lawyers. We also discuss the fact that my services are completely inappropriate in situations where one or both spouses are hiding or disposing of assets and/or income, when the parties have complex situation or when the parties are unable or unwilling to cooperate in a friendly non-adversarial manner.

#4. Advanced Planning

Lawyers are great at giving advice. But, there are steps that may save time and money that can be made even before you go to a lawyer.

Parenting after Separation Seminar

If your disputes are over children, you and your spouse may want to attend the free 6-hour Parenting After Separation Seminar. The facilitators help parents understand how to minimize the impact of Separation on children, and offer general information (rights and responsibilities) about custody, access and child support. If you would like to attend this free seminar, please select the link below for a list of Cities (and telephone numbers) in Alberta that have an in-class seminar:

Parenting After Separation Seminar

Alternatively, you may complete the course online by going to this link: pas.albertacourts.ab.ca

Published Books

There are several very good books that will help you with the process of Separation and Divorce found in your public library or local bookstore. Make sure that Divorce literature applies to Canada, property division applies to the laws of the Province you live in, and the publication date is recent.

Financial Advisor

Before taking the Agreement to a lawyer for advice and signing, you can each take the Agreement to a Financial Advisor (i.e. Investment Advisor, Chartered Accountant or Divorce Financial Analyst) to determine any financial consequences involving the proposed division (such as capital gains taxes, disposition costs and balancing of risks).

A financial advisor may be extremely important in the following situations:

• Transferring rental properties to a spouse may trigger capital gains taxes or losses;
• Either party may have significant capital gains and losses on investments that have not yet been declared.

You can both review your documentation with your financial advisor to ensure disclosure is accurate with respect to any financial accounts the financial planner is aware of. You can also ask if there are any financial considerations that you both ought to consider.

Some lawyers have a financial background and would be appropriate to advise on this. If there are complex financial issues, your lawyer will advise as to whether you should see a financial advisor.

Family Law Information Centre (operated by Family Justice Services)

The Family Law Information Centre at the Court House can confirm child support calculations and standard of living tests—all for free, which take into account the incomes of both parties after payment of government source deductions, payment/receipt of spousal support and payment/receipt of child support. Standard of living tests are only applied in certain circumstances.

We also provide you with a copy of these calculations that you can take to your lawyer, along with your Separation Agreement (if we draft if for you) for review and advice.

You can also find the following free online lookups:

• Federal Child Support Guideline Calculator
• MySupportCalculator.ca

Banker / Creditor

You can each take the Agreement to your banker or creditor to ensure that one spouse will qualify to assume a debt if that is the Agreement (assumptions of mortgages are not automatic as they once were—the party keeping the matrimonial home may have to re-qualify unless both spouses agree to remain on the mortgage jointly until one spouse qualifies on their own, obtains a co-signer, or until a set date in the future).

Normally, I would draft the Agreement for both parties. They would then take it to their bank to ensure that the bank will cooperate with the parties’ wishes regarding re-financing. We would then make any relevant changes to the Agreement based upon the bank’s agreement, prior to the parties’ meeting with their lawyers.

Financial TIPS on sale of matrimonial home:

• If you and your spouse intend to sell the matrimonial home and purchase new properties (i.e. one for each), be sure to negotiate with the bank to have them waive the mortgage penalties upon the sale of the matrimonial home. Often, they’ll cooperate. HOWEVER, be also sure that you get the lowest possible interest rate.
• You may not realize that when banks happily agree to waive your interest, it is because you did not negotiate the interest rate. Sometimes you SAVE by taking the penalty for a lower interest rate, especially if you think interest rates will go up in the future.
• If you are selling at one low interest rate and are being offered a higher rate for the purchase of a new home (ie. mortgage rates have gone up since signing your last mortgage), there should be no mortgage penalty. Why would there be a penalty when you are signing on at a higher mortgage rate? If the bank still wants to give you a penalty, then I would suggest you consider looking elsewhere for a mortgage.
• Negotiate negotiate negotiate with your Realtor! If one Realtor is used for the sale of your matrimonial home and purchase of two separate homes, you should be getting a very good deal on Real Estate Commissions.

Monthly Budget

Preparing and following a monthly budget is always important. However, I normally don’t expect people to prepare a budget and then say to their spouse “this is what I need, so this is what I want”. Normally, property is divided fairly and an appropriate amount of child support and spousal support is paid. Then, you learn to live within your means. You don’t usually get more money simply because you want it or pay less because you feel you can’t afford to pay it.

Normally, you get what you are entitled to (or pay what you are required to pay) then learn to live within your means.

This is not legal advice, just my view of things. I mention this because some lawyers spend a lot of time having the couples prepare monthly budgets and I have yet to fully appreciate the value of this timely and expensive exercise, unless:

• A spouse might negotiate extra money upfront (and less later) in order to afford and keep the matrimonial home while the children are still in school.
• A monthly budget will help someone figure out if they can afford to keep the matrimonial home— but usually determining whether that person qualifies for a mortgage answers the same question.
• A monthly budget will help the parties figure out who pays what until such time as everything has been divided.

Child Tax Credits and GST Credits

Curious as to how much child tax credits will increase or how much in GST credits you might qualify for? Though this is not likely to affect the division of things, if you find out that your child tax credits will increase a hundred or two, it might reduce your stress a little. Check here for free online calculators:

Canada Revenue Agency CCTC and GST Benefits Calculator

Division of Property, Assets and Debts

In the sidebar of this blog fill in the form to receive your free Divorce & Property Workbook.