Spousal Support: Three Common Misassumptions

September 8, 2017

Last month, my colleague F. Scott Murray debunked four myths about divorce. Continuing that theme, this month I clear up some confusion surrounding spousal support. This post tackles three common misassumptions about one ex’s financial obligations to the other after they split.

Misassumption #1: Infidelity disentitles you to spousal support.

This is true in some jurisdictions, but NOT in British Columbia.

In BC, we have something called a “no fault” family law system. This means that even if one spouse engaged in an extramarital relationship, this has no impact on how the couple’s assets are divided, how much parenting time each parent gets, or who pays or receives spousal support. 

Misassumption #2: If I earn more money than my spouse, I must pay him/her spousal support.

Not necessarily.

As my colleague Alex Boland explained in a previous post, when a couple divorces, one spouse is not automatically entitled to receive spousal support just because his or her income is lower than their ex’s. (This is different from child support, which is payable when there is an income disparity between the ex-spouses.)

You can either agree between you that one spouse will pay support to the other, or a judge can order it. How much support is payable and for how long will depend on various factors, including how long the parties were together, whether sacrifices were made on one side to care for children or relocate to support one spouse’s employment advancement to the detriment of the other, and the ability of the spouses to be self-sufficient moving forward. Also, if the difference between your incomes is minimal, this can reduce the chances that spousal support will be payable.

Misassumption #3: Spousal support obligations last forever.

While some cases warrant payment of spousal support indefinitely, these payments are generally intended to assist one party while they become self-sufficient again.

For briefer relationships with no children (again, see Alex’s post Divorcing Dinks: Double Income, No Kids), support obligations might last anywhere between half to the total number of years the parties were together. For example, where the relationship lasted seven years, the duration of spousal support could be 3.5 to 7 years. Where the separating couple have young children, spousal support could last longer than the length of the parties’ relationship, giving the non-working parent time to transition to part-time and then full-time work as the children move out of elementary school.

A final word: How spousal support may be a good thing

Spousal support is tax deductible for the paying spouse and taxable in the hands of the receiving spouse. This means that where there is a vast different in the spouses’ income levels, the tax benefits to the payor may far outweigh the negatives of fighting with your ex over small amounts.

For example, if a spousal support payment of $1000 only costs the payor $600 in after-tax dollars, but is worth $850 in the hands of the recipient, there is a net gain in family income of $250 a month. This can be significant when it comes to separation and divorce negotiations.

Be sure to get financial and legal advice about how creative spousal support agreements can benefit a separating couple. Spousal support can be an ugly term, but the advantages of an ongoing tax deductible asset transfer may be more attractive than you think.