On the surface, declaring income for a divorce may seem relatively straight-forward. However, it often becomes a matter of far more than just presenting last year’s tax return. For Alberta workers who must factor in commission, bonuses or even a job change, estimating and identifying income can become a challenge. It is important to consider how one’s compensation structure could affect issues like child support, spousal support and division of assets.
One common thing people struggle with in divorces is the allocation of bonuses. If a bonus comes in after a divorce is finalized but represents the work done while the marriage was still active, it may still be considered joint property. Bonuses can put someone without savvy counsel in a bind, as opposing counsel can try to split it as marital property while also factoring it into child support. This is known as double counting and can be avoided with clear disclosure and legal support.
Those who are paid on commission often try to time their divorce filings before closing a big deal. This is because everything prior to the divorce is considered joint property and can be split evenly. However, it is important to note that a spouse may still have valid claim over these commissions if the work was done during the marriage. This can cause some conflict in a divorce.
There are many other job- and income-related challenges that can enter a divorce. What happens if someone changes jobs midway through the process? How are job perks, like a company vehicle, factored in? The complexity of a divorce as well as future child and spousal support can be deeply impacted by compensation structure overall. Working with an Alberta family lawyer can help people navigate their options on either side.
Related Posts: Managing finances during the family law process, Understanding home ownership and property rights in a divorce, Travelling without children during a family law dispute, Set boundaries and rules to protect kids from child custody drama