Case Study: Spousal Support in a High-Net Worth, Short Term Marriage
The parties, Ms. Ahmad and Dr. Khalid, were married in February 2013, after meeting on a dating site and dating for a brief period. Their only child, Arman, was born in January 2015.
On Valentine’s Day 2015, about a month after Arman was born, Dr. Khalid announced that he wanted a divorce and served Ms. Khalid with divorce papers.
Dr. Khalid, is a doctor living in Wexford, Pennsylvania. At the time of separation, Ms. Ahmad, was not employed, had no income, and was providing sole full-time care for Arman. She had been enrolled in a Master’s program prior to Arman’s birth, and had finished one semester before becoming a mother. Following the separation she had left the U.S. and moved back to her parent’s house in Brampton, Ontario.
Ms. Ahmad’s Claim for Spousal Support
Ms. Ahmad made a claim for interim compensatory spousal support based on the fact that she had put her education and career on hold following the marriage and birth of the child. Based on Dr. Khalid’s declared income in 2016 (USD $255,000, or approximately CAD $324,640), she sought monthly payments of $8,626. For someone with Dr. Khalid’s income, this is roughly the midrange of the Spousal Support Guidelines (SSAG), with $9,299 at the high end of the range, and $7,464 at the low end.
Spousal Support Award
Justice Emery concluded that Ms. Ahmad was entitled to spousal support on a compensatory basis. He used his discretion and applied the SSAG to award Ms. Ahmad interim spousal support at the lower range of the Guidelines in the amount of $7,500.
In making this decision, Justice Emery considered the fact that a) this had been a short marriage, and b) that Ms. Ahmad was, at the time of the decision, residing in her parent’s home (and therefore, presumably not paying rent or other expenses).
Despite the foregoing, the Judge acknowledged that Ms. Ahmad had put her education and potential career on hold when she married Dr. Khalid, moved to the States, and had a child. Additionally, she was the primary caregiver for Ahmad.
Furthermore, while Dr. Khalid had pointed to his significant expenditures (including a $3,500 per month mortgage on a home purchased post-separation) as a reason to lower his spousal support obligations, Justice Emery stated:
I consider the mortgage payments Dr. Khalid is making not as an expense, but as a prepayment on an investment he has made for the future. He voluntarily incurred this expense and it will accrue to his benefit in the future as a property that will either generate income or appreciate in value. It is not an expense that he can use as a shield to pay spousal support. This is particularly so since he incurred that expenditure after the date of separation.
Important Spousal Support Considerations for High-Net Worth Individuals
Both spousal support and child support are calculated using prescribed formulas. In the case of spousal support, the formula is applied through the aforementioned SSAG.
The SSAG are recommendations only, and are not legislated. However, they carry great weight and are highly influential on judges making support decisions.
The SSAG generate ranges for both the length and the amount of support, and consider a number of relevant factors including the length of cohabitation prior to marriage, the length of the marriage itself, and whether the payor spouse is also paying child support. A spouse requesting support must establish their entitlement to it before the court can make a determination about quantum and duration.
For incomes above $350,000 the SSAG can produce numbers that are very high. In situations where income is above that amount, judicial discretion will need to be applied, and each individual case will be determined based on its particular circumstances.
Similar guidelines exist for child support though the Child Support Guidelines (CSG), which we will explore in a future blog post.
If you are a high-net worth individual contemplating separation, or have already begun the process, contact the Toronto family lawyers at Arbesman Hamilton LLP for guidance. Let us focus on your rights and negotiate the best possible outcome for you while you focus on rebuilding and moving on. Contact us online or at 416-481-5604 to book a consultation.