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5 Financial Planning Considerations for Separation or Divorce

Navigating the emotional and financial intricacies of separation or divorce can be overwhelming. From the initial decision to part ways to the finalization of legal matters, each step involves critical financial considerations that can significantly impact your future. Here, we break down 5 key considerations to help you make informed decisions and potentially save money along the way.

#1 Paying for the divorce itself

Did you know there are several paths you can go down to have your divorce finalized? They each have very different processes and costs. It is wise to explore all applicable options prior to paying any fees or signing anything. Here are the most common options:


This is where both parties hire their own lawyer and essentially battle it out, through their respective lawyers, on all of the important issues such as child custody, support payments, and division of assets. This can oftentimes be an adversarial process and is most commonly used when the parties cannot agree on important issues. Another option in a traditional divorce is for both parties and both lawyers to agree on a collaborative process. Everyone agrees to meet and work together towards a resolution to the issues at hand. Oftentimes this is a more expensive route than some other options available to you.


This option requires the expertise of an independent mediator who acts as a neutral third party who will help the couple to communicate with each other and to reach an agreement on the outstanding issues. The mediator will not make any decisions for the couple but help them reach their own decisions. Once an agreement is reached, each party will have to seek out their own individual legal advice before signing any agreements. This can potentially save you some money if you are able to agree on everything during mediation and only have to hire lawyers for the final step because you aren’t clocking as many hours with the lawyers.


This is used when the parties are unable or unwilling to agree and choose a third party to decide on the outcome. The neutral third party (the arbitrator) is selected with the consent of both parties, hears the evidence on any outstanding issues, then makes a legally binding decision based on that evidence.


This involves a trial of all issues at stake and both parties must engage in the full discovery process. Both of you will present the facts of your case on issues that you disagree on. Your lawyer will present a case as to why what you want is the best choice and the other party’s lawyer will do the same. Both arbitration and litigation can get quite expensive since there are multiple professionals involved with a lot of back and forth.

Alternative Methods

A great example of this is the One Family Lawyer Model ©. This option is where you have one lawyer who provides legal advice and services to you both from beginning to end when you have an uncontested divorce, meaning the parties are amicable. This option can reduce significant time, stress and money for both parties with a flat fee so you know what to expect.

Other professionals that can assist you

  • Psychologist or therapist for you and/or the entire family.

  • Accountant to determine the status of a business and to determine whether assets have been hidden.

  • Valuator to determine the value of a pension or business.

  • Appraiser to give monetary value to an asset.

  • Child specialist who focuses exclusively on the children’s concerns and interests.

  • Career counsellor to help with career changes or re-entry into the workforce.

  • Chartered Financial Divorce Specialist who has specific training in the financial aspects. We have a team member who is currently earning this designation!

A qualified, well-chosen team working on a client’s behalf can help reduce stress, minimize costs and assist in helping clients make decisions for better family outcomes.

# 2 Separation Date   

It is important to document your separation date. You are not legally separated after 90 days of living separate and apart with no periods of reconciliation, otherwise the clock starts over. The separation date, also known as a valuation date, is an important date for various reasons.

For one, the separation date is the reference point used to determine when marital property shall be appraised. It is also critical in establishing when one or both parties is eligible to file for divorce.

After one year of being separated, it is possible to file for divorce and if there is complete agreement on all aspects of the dissolution between the parties, they would simply require papers being filed. Some people choose to remain separated for an extended period of time because separation allows one of the parties to remain connected to company benefits,  especially health and dental.

It is important to have a separation agreement, which is a contract between parties who are separating or divorcing. It deals with issues such as where your children will live and what time periods they will spend with the other parent, how much child support will be paid, how much spousal support will be paid, etc.

#3 Spousal Support

In the case of  spousal support, a Federal matter, the years the couple were also living common law counts for the  duration determination. Imputed income is used to put a figure down that is  in the range of what could logically be expected to be earned for income if the paying party claims they are not working.

Spousal support may be ordered by the court if the parties are applying for a divorce and if the parties are ending an Adult Interdependent Relationship. You are in an Adult Interdependent Relationship if you are in a relationship of interdependence with another adult  for three years; or  for less than 3 years if you have signed an Adult Interdependent Partnership agreement; or  for less than 3 years if the two of you have a child together. 

The purpose of spousal support is to recognize any economic advantages or disadvantages to the spouses coming out of the marriage;  divide up any financial costs arising from the care of the children over and above the child support;  lessen any financial hardship of the spouses which may have taken place because of the end of the marriage; and  as much as possible, encourage the spouses to become able to support themselves within a reasonable period of time. 

The Divorce Act (Canada) says that when making a spousal support order, the court must think about the condition, means, needs and other circumstances of each spouse, including:  how long the spouses lived together;  the functions performed by each spouse during the time they lived together; and  any order, agreement or arrangement relating to support of either spouse. The Family Law Act also tells the judge to think about these factors:  whether or not either of the spouses / partners have a legal obligation to support another person;  if the paying spouse / partner lives with someone else, how much that person contributes to their household expenses (and by doing that, increases the ability to pay support); and  if the recipient spouse / partner lives with someone else, how much that person contributes to their household expenses (and by doing so, decreases the financial need). 

Although spousal support guidelines are not law, they are used to base decisions on whether or not spousal support should be paid and how much.

#4 Child Support

Your children have a legal right to financial support from both parents and you both have a legal responsibility to provide this support. Those rights and responsibilities do not end with divorce or separation. 

The Federal Child Support Guidelines are a set of rules and tables used to determine child

support when parents divorce. They are the law. Their main goals are:

  • to establish a fair standard of support for children so that they continue to benefit from both parents’ incomes after the separation or divorce;

  • to reduce conflict and tension between parents by making the calculation of child support more objective;

  • to ensure that parents and children in similar situations are treated the same; and to make the legal process more efficient and encourage settlements by giving courts and parents guidance about child support.


It is important to know that there are also provincial and territorial child support guidelines. The Federal Guidelines apply unless you both live in a “designated” province. There are three designated provinces: Manitoba, New Brunswick and Quebec. These provinces have made arrangements with the Government of Canada to use their own guidelines in divorce cases when both parents live there.

The steps to determine the amount of support are:

  1. Determine the number of children. The Divorce Act says that you have to support any “child of the marriage.” These are children you had together during your marriage, including adopted children, who are under the age of majority and are still dependent; or have reached the age of majority but cannot become independent because of an illness, disability or other cause. In many cases, courts consider the pursuit of reasonable post-secondary education to be a valid “other cause.”

  2. Determine the parenting arrangement. The type of parenting arrangement you have can affect the way you calculate child support under the Federal Guidelines. The Federal Guidelines use the following three terms to describe parenting arrangements: “sole custody”, “split custody” and “shared custody.”

  3. Determine what child support table will be used. The Federal Guidelines have child support tables for each province and territory. 

  4. Calculate annual income. In some situations, only the income of the paying parent will be required. In other cases, both parents’ incomes will be needed. You will need to calculate both of your incomes if: you split or share custody of the children; one of you is the parent and the other acted in the place of a parent to the child; there are special or extraordinary expenses; either of you has claimed undue hardship; your child is at or over the age of majority and the way you decided to calculate child support is different from the way you would calculate it if the child were under the age of majority.

#5 Be prepared

For those preparing for a separation, there are some steps that can assist in avoiding unnecessary problems.

  1. Apply for a credit card in your own name, if you have none, to build your own credit rating.

  2. Create a budget based on your new income and expenses.

  3. Open your own bank account, if you don’t have an individual account, to protect yourself in case joint accounts become empty.

  4. Make copies of statements of all bank accounts, loans, lines of credit, credit cards and investments and insurance statements. It is important to know the balances at the time of separation and to find proof of what you each owned pre-marriage.

  5. Once the separation date is agreed upon, even if you are living in the same house, you may want to get an interim separation agreement in place.

  6. Cancel as many joint credit card accounts as soon as possible if they are at a zero balance to protect against your spouse increasing your debt. If you cannot cancel them, send a letter to the creditors with a copy of the separation agreement to outline the situation and inform them you will not be responsible for debts accumulated after that date. Do not continue to use joint credit.

  7. Take dated pictures or videos of each room in the house and all physical assets. This proves the assets existence plus the quality and condition of those assets. This could be valuable when trying to establish any missing assets at a later date.

  8. Check out your safety deposit box for important papers. Take copies of all important papers including insurance policies.

  9. Take copies of both you and your spouses’ tax returns for the last two to three years, as a minimum. Slips filed with the tax return may be valuable clues to hidden assets.

  10. Consider if you might need to update your education to earn more and become more employable? Research the costs and job opportunities to negotiate into your separation agreement.

  11. If you think child custody may be an issue, start keeping a journal and record things from the child’s point of view. This includes the kids’ activities, both parents’ participation, consideration for the children’s welfare, etc. After the separation, continue to record visits and significant events. 

  12. Get professional legal advice before you move out of the house. In some jurisdictions, leaving the home could impact custody and/or your rights to the family home.

  13. You will need emotional support. Although family and friends are best, they are not objective and are not always available. Check out community support groups to help you through this challenging transition.

  14. Store all of the important documents you have gathered in a safe place outside of the house for extra protection.

  15. Try to stay out of court. If a hard position is taken, the results are often not financially better and cost a great deal in legal fees, sometimes more than the assets are actually worth. Look at the long term of any decisions you consider and fully understand what effect they would have on you both emotionally and financially.

  16. If children are involved in the process, work on behaving as civil and considerate as possible, being mindful of what is said about your spouse. Children handle family breakdown better if they don’t feel they are forced to choose or are in the middle of a battlefield.

We understand the process of separation and divorce is a difficult and overwhelming one. You don’t have to do it alone, we are here to help. Please contact us today for a free consultation.


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