Remarriage? Who wants to think about the legalities of anything past signing the new marriage certificate when you are getting married again? For most, remarriage is a significant turning point of a renewed beginning with all the hopes and dreams that most of us lost during divorce or widowhood, hopefully, with the lessoned learnt from the first experience.
Who wants to think about legals issues and considerations of the impact on others when we want to be selfish and focus on our 'special day'? Before walking down this isle or, if you prefer, standing on a beach or overlooking a volcano to say your wedding vows you may want to consider the complications that might arise which may cloud your bright, shinny future. Ben Franklin said, "An ounce of prevention is worth a pound of cure". In this case having your remarriage legal issues well in place before you promise the rest of your life to another may add to the relief allowing you to actually enjoy your 'special day' and save you a lot of money should the unthinkable come to fruition.
Here's the link to my story......it may save you a fortune and your family many headaches to ensure you have everything well plannned out beforehand and that your estate is actually handled in the way you had intended it to be handled.
http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100712_093205_4840
Wednesday, July 28, 2010
Monday, July 19, 2010
The Collaborative Movement in the GTA
Collaborative divorce sounds like a juxtaposition of terms but this divorce process can save lives! OK, that may sound a little dramatic but, in reality, it is the quality of life going forward, especially for children. There are many different divorce processes which I have explained in an early blog so I won't g through the detailed description of each but rather focus or highlight what the collaborative process is all about.
Each couple must sign the collaborative agreement or a participation agreement. In the agreement each spouse promises to be upfront, honest, respectful and most importantly not go to court. Both spouses must retain a collaboratively trained lawyer and, initially meet with their newly retained legal council. The first 4-way meeting which consists of both spouses and their lawyers discusses the process, how it works and the rules of conduct.
At the second meeting the issues are brought forward. Every divorce is different and some couples may agree, for example, on the financial issues and custody issues but not on access issues (access to the children). Wherever there is disagreement that is where the couple and their lawyers work to some form of resolve. The reason the lawyers are there is to ensure that the spouses are being fair to one another from a family law perspective. Sometimes people feel they will give away everything to make the divorce issues go away but later live to regret the decision. Lawyers help to ensure the fairness prevails and also correct any misconceptions. Collaborative divorce embraces the interdisciplinary model which simply means that other professionals may be invited to join the group. Often family professionals are necessary when access issues are at the forefront. They can work out parenting plans with the couple. Often times financial professionals can be brought into the group to help with budgeting issues and also to ensure that the assets you want to keep are the assets you can afford. Sometimes spouses will give away retirement funds, for example, to keep the house but they can't afford to keep the house and they have to work all their lives as they cannot afford to retire. Often there are solutions available at the beginning of the divorce that would negate these future issues.
What is really important in the collaborative process is that despite the bad feelings each spouse has for one another during this time because they have treated each other respectfully they can continue to co- parent after the divorce is over. There are studies that show that affectively co-parented children grow up to be just as stable and 'normal' as children of couples who remain together. High conflict divorces always create problems for children. Sometimes they are manipulated by one parent or the other and grow up to resent the parent who did so when they are old enough to understand. These children often end up with issues that they grapple with well into adulthood. So, therefore, my statement that collaborative divorce can save lives.
If you are going through a divorce or thinking about it here are some links to the GTA lawyers, family professionals and financial professionals who are collaboratively trained in this area.
www.peelcollaborative.com
www.collaborativepracticetoronto.com
If you are out of the Toronto area there is an international association that provides names of professionals as well as links to local groups.
www.collaborativepractice.com
These website also have a large amount of information available about the collaborative process.
Each couple must sign the collaborative agreement or a participation agreement. In the agreement each spouse promises to be upfront, honest, respectful and most importantly not go to court. Both spouses must retain a collaboratively trained lawyer and, initially meet with their newly retained legal council. The first 4-way meeting which consists of both spouses and their lawyers discusses the process, how it works and the rules of conduct.
At the second meeting the issues are brought forward. Every divorce is different and some couples may agree, for example, on the financial issues and custody issues but not on access issues (access to the children). Wherever there is disagreement that is where the couple and their lawyers work to some form of resolve. The reason the lawyers are there is to ensure that the spouses are being fair to one another from a family law perspective. Sometimes people feel they will give away everything to make the divorce issues go away but later live to regret the decision. Lawyers help to ensure the fairness prevails and also correct any misconceptions. Collaborative divorce embraces the interdisciplinary model which simply means that other professionals may be invited to join the group. Often family professionals are necessary when access issues are at the forefront. They can work out parenting plans with the couple. Often times financial professionals can be brought into the group to help with budgeting issues and also to ensure that the assets you want to keep are the assets you can afford. Sometimes spouses will give away retirement funds, for example, to keep the house but they can't afford to keep the house and they have to work all their lives as they cannot afford to retire. Often there are solutions available at the beginning of the divorce that would negate these future issues.
What is really important in the collaborative process is that despite the bad feelings each spouse has for one another during this time because they have treated each other respectfully they can continue to co- parent after the divorce is over. There are studies that show that affectively co-parented children grow up to be just as stable and 'normal' as children of couples who remain together. High conflict divorces always create problems for children. Sometimes they are manipulated by one parent or the other and grow up to resent the parent who did so when they are old enough to understand. These children often end up with issues that they grapple with well into adulthood. So, therefore, my statement that collaborative divorce can save lives.
If you are going through a divorce or thinking about it here are some links to the GTA lawyers, family professionals and financial professionals who are collaboratively trained in this area.
www.peelcollaborative.com
www.collaborativepracticetoronto.com
If you are out of the Toronto area there is an international association that provides names of professionals as well as links to local groups.
www.collaborativepractice.com
These website also have a large amount of information available about the collaborative process.
Wednesday, July 7, 2010
Spousal Loans ~ Potentially saving Thousands!!!
I saved a client over $23,000 a year employing this strategy, a YEAR, in taxes!!!!!
OK, so....this is how it works. You have to be married. Your spouse has to be unemployed or have a big variance in income to employ this strategy. It's a form of income splitting that is a way to avoid paying taxes that is completely legal.
Canada Revenue Agency (CRA) rules that a higher income earning wife, for example, cannot gift her husband a large sum of money to invest to take advantage of his lower marginal tax rate. Any investments made on his behalf must come from his earned income, otherwise the income (in the form of interest, dividends and capital gains) is attributable back to the wife. If, however, the lower income spouse does the savings and the higher income spouse pays the bills then it's OK to attribute any income from investments to the lower income earner PROVIDING that he does not invest, annually, more than her makes net of taxes.
If, however, you have a spouse who has no income then you can lend that spouse money at CRA's prescribed rate (currently 1%) and then that spouse can invest and any growth attributed from the investments are taxed at their lower marginal tax rate. Because the spouse is borrowing to invest and is earning income from the investment then the spouse can also write off the cost of borrowing (ie: the interest charges) on their income tax return. The lending spouse, however, must claim the interest as income but at the low rate of 1% the cost is more than offset by the spouses lower marginal tax rate.
OK, so....this is how it works. You have to be married. Your spouse has to be unemployed or have a big variance in income to employ this strategy. It's a form of income splitting that is a way to avoid paying taxes that is completely legal.
Canada Revenue Agency (CRA) rules that a higher income earning wife, for example, cannot gift her husband a large sum of money to invest to take advantage of his lower marginal tax rate. Any investments made on his behalf must come from his earned income, otherwise the income (in the form of interest, dividends and capital gains) is attributable back to the wife. If, however, the lower income spouse does the savings and the higher income spouse pays the bills then it's OK to attribute any income from investments to the lower income earner PROVIDING that he does not invest, annually, more than her makes net of taxes.
If, however, you have a spouse who has no income then you can lend that spouse money at CRA's prescribed rate (currently 1%) and then that spouse can invest and any growth attributed from the investments are taxed at their lower marginal tax rate. Because the spouse is borrowing to invest and is earning income from the investment then the spouse can also write off the cost of borrowing (ie: the interest charges) on their income tax return. The lending spouse, however, must claim the interest as income but at the low rate of 1% the cost is more than offset by the spouses lower marginal tax rate.
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