Articles
Essential Information for Transitioning Through Separation and Divorce and Beyond
Divorce Finances

With the advent of social media, today’s divorce is more public than it should be. It can be as simple as posting a change in your status on Facebook from married to single or as ostentatious as sending invitations to a Divorce Party to “celebrate” the “broke and better”, “new and free”, and “new single status.”  As nonchalant as this may sound, separation and divorce is difficult for everyone involved.  When the “divorce ship” sets sail, most people will experience a wide range of emotions including a sense of loss, grief, confusion, uncertainty, anger, and sadness.  Navigating through the “waters” of a divorce means significant changes to all facets of your life. Making it more difficult is the fact that the traditional legal process is not well suited for family issues. When it comes to divorce, the traditional legal process can turn couples into adversaries, which adds significant stress to an already intense situation. And, to make matters worse, the court system is expensive and over capacitated, which means divorces are expensive and take longer to complete. Fortunately, the court is not the only place to resolve family disputes.  Alternative dispute resolution (ADR), such as mediation and or arbitration, is effective in resolving family disputes.  Although, there are circumstances that warrant court intervention to mitigate a family’s battle, in most cases, ADR is effective in navigating a couple through the turbulent waters of separation and divorce. Unlike the traditional legal process, ADR emphasizes the individual’s wellbeing after the divorce has been finalized. If you are facing a breakdown in your marriage and divorce is imminent, then consider the following information to prevent capsizing your ship as you sail into the storm.

Prior to Separation and Divorce

Okay, so the storm is on the horizon. Do you find a safe harbor and avoid it, or weigh anchor, and let it pass over, or is it best to unfurl the sails and head straight into it? Simply put – is the marriage salvageable? If so, have you tried to explore what is causing the relationship to breakdown (assuming it isn’t obvious), and have you tried to work it out? Have you tried getting professional help such as marriage counselling?  In the end, if you cannot avoid the storm that is coming or decide to head straight for it, then before you initiate the separation process, consider the following:

  1. Resources:

If you are employed, review your health and benefits program to find out if your plan covers services for employees going through divorce.

  1. Living arrangements:

In general, where you are living and the length of transition period from married to separated depends on the level of conflict. If there is abuse and or domestic violence, then physical separation should be immediate and the individuals should be living in separate households. If the situation is severe, then the police should be notified and a restraining order may be required.

Where couples are respectful to one another and willing to negotiate issues such as who is keeping the family home, then creative resolutions are possible. Families where one party cannot move out of the matrimonial home due to financial or other reasons may live in separate rooms in the same home until suitable arrangements can be made. It is important to note that for tax purposes, the Canada Revenue Agency (CRA) does not recognized couples (married or common-law) as being separated if they are living in the same household. The CRA defines a couple as being separated when each party has been living separate and apart for at least 90 days because of a breakdown in the relationship with the date of separation being the day you started living separate and apart.

  1. Finances:

Know your family financial situation. Know what matrimonial assets and liabilities you have and gather the necessary documents to support its value. Division of matrimonial property is not only a highly contentious issue during divorce, it will also determine the foundation of your financial future as you move forward with your life as single or single parent. Determination and willingness to pay spousal support and child support is also highly contentious because it can be a financial drain on the parent paying, and can alter the lifestyle both parents are accustomed to.

  1. Children:

Be aware of the emotional toll and consequences separation and divorce will have on you and your children. Custody and parenting arrangements can be a challenge to work through particularly if both parents are single and working (or going to school) and if there is more than one child.

Alberta government offers Parenting After Separation (PAS) courses for parents or guardians who are separating or getting a divorce. This course is offered online (https://www.alberta.ca/pas.aspx) or you can take it in person and takes about six hours to complete.

Generally, routines helps the children feel grounded. It is important to settle on a routine that works for everyone. The routine will need to be established around work, school, and extracurricular activities. The time to commute must also be considered when planning co-parenting arrangements. The following are examples of the most common co-parenting arrangements:

  • Alternating weeks

This parenting plan allows the children to reside with Parent A’s house one week, then with Parent B’s house for next week.

SUN MON TUES WED THURS FRI SAT
WEEK 1 A A A A A A A
WEEK 2 B B B B B B B
  • 2-2-3 parenting time

This parenting plan allows the children to reside with Parent A for two days, then with Parent B for two days, and then spend a long three-day weekend with Parent A. The next week, the schedule alternate and the children reside with Parent B for two days, then Parent A for two days, before spending a long three-day weekend with Parent B. This arrangement allows the parents to have alternating weekends with the children.

SUN MON TUES WED THURS FRI SAT
WEEK 1 A A B B A A A
WEEK 2 B B A A B B B
  • 3-3-4-4 parenting time

This parenting plan allows the children to reside three days with Parent A, three days with Parent B, then four days with Parent A, followed by another four days with Parent B.

SUN MON TUES WED THURS FRI SAT
WEEK 1 A A A B B B A
WEEK 2 A A A B B B B
WEEK 3 A A A B B B A
WEEK 4 A A A B B B B
  1. A no-fault divorce

One last thing to consider is that Canada has instituted a no-fault divorce. Per Canada’s Divorce Act, the only grounds for a divorce is a marriage breakdown because of any ONE of the following reasons:

  1. You have been living apart for one year or more.
  2. Your spouse has been physically or mentally cruel to you.
  3. Your spouse has committed adultery.

A no-fault divorce means that regardless of the reason for the marriage breakdown it will not affect the division of your matrimonial assets, or time with the children (assuming no criminal charges have been laid, or any reasons of mental incapacities).

During Separation and Divorce

When a ship is about to enter rough seas, it is advisable to “batten down the hatches.” If the relationship is amicable after the breakdown in the marriage, and both party’s emotions are in check, then it is best if you and your spouse can agree on major issues such as which assets or debts each one should retain, who can keep the family house, or when to sell the family house, child support, spousal support, custody, and parenting arrangements before divorce proceedings. Settling on an interim plan reduces stress and conflict when going through the divorce process.

Even if the separation and divorce is amicable, divorce is stressful, emotional, and at times overwhelming. Critical issues related to your divorce have a significant impact on what your life after divorce will look like and take time to resolve. Therefore, many couples going through divorce experience a fear of the unknown and urgent feelings of wanting to move forward and start their new life after divorce. Establishing a new routine without your former partner will help alleviate these emotions. Considerations include maintaining financial responsibilities, determining access to the family home, and establishing parenting arrangements so that you and your soon to be ex-spouse can establish a firm foundation and navigate the divorce process with your feet on the ground and eyes on the horizon.

Post-Divorce

Once you have cleared the storm, it’s time to get your ship in order and prepared for sailing to your destination. This is a good time to do a financial checkup. Understand your cash flow, know your credit situation, and ensure you are properly insured. If necessary, see a financial planner to prepare a financial plan or update your current one.

Divorce is a life changing event, and like all life changing events, there are tax consequences – good and bad. Ensure your personal income tax information is current with the CRA, including marital status, address, and direct deposit information.

Completing personal tax returns are often neglected during divorce. If you have outstanding tax returns to file, then take the time to file all outstanding returns and ensure you have a plan to pay any outstanding taxes in arrears to avoid further penalties and interest. Be aware of the tax implications that result from separation and divorce and that they are reported appropriately on your tax return. If necessary, see a tax specialist to ensure you do not miss reporting a tax liability or miss any tax saving opportunities.

Conclusion

Divorce is not just an end state, it is a process. If you are facing or going through divorce, then no matter what stage of the process you are in, you can benefit from the following advice:

  1. Separate your emotions from the issues – if divorce is inevitable, then do it efficiently and harmoniously so that you can get on with your lives.
  2. Know your position and priorities – look at the whole picture, and determine what is important to you; do not focus on what is not.
  3. Educate yourself and seek professional guidance to assist you through your struggles.
  4. Be aware of collateral damage – ending a marriage or common-law relationship can have an impact beyond the couple. In the case of separating and divorcing parents, the post-breakup arrangements can alter the regular and expected routines of children. Children’s reactions to these new circumstances can vary, depending on their age and stage of emotional or physical development. Some may experience a lack of understanding and feel confused or anxious, while others may express feelings of sadness, anger or loss. It is crucial that these issues, along with other child specific needs, are considered when developing a parenting plan after the dissolution of a marriage or common-law relationship.