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How will a breakup affect your finances?

Alberta couples seeking a divorce have many things to think and worry about. The months and years immediately after the breakup of a marriage can be full of uncertainty, especially where your finances are concerned. The best way to minimize any struggles you might have at that time is to work to get the fairest and fullest portion of martial assets possible.

To do this requires that you know the difference between the assets that the law considers jointly owned and those which are exempt from property division. Joint assets typically include those either of you acquired at any time during your marriage up to the date of your settlement or divorce trial, at least in Alberta. It is also important that you understand any negative ramifications you may face for acquiring certain assets in the divorce.

Providing proof of what you deserve

Personal gifts, inheritances and award for damages won in a civil case generally fall into the category of assets exempt from marital property division. However, you may have to provide proof that such items are, indeed, exempt. Additionally, if any of these items increased in value during the marriage, the court may determine that the increase is subject to asset division.

You would be wise to begin early seeking and gathering any documentation you will need to protect your personal assets or to claim your share of your spouse's property. It is likely that you never anticipated your marriage would end in divorce, so the work you must do to prove these factors may be significant.

Support may help make ends meet

If you have children, you may be eligible for child support payments from your ex as well as government benefits through the Canada Child Benefit program. Both of these are non-taxable income, but a spouse who pays child support may not deduct the amount from his or her taxes. A parent who has 60% or more of parenting time may also qualify for other tax credits.

Spousal support, on the other hand, has different tax ramifications. If the court awards you support from your ex, you may end up paying taxes on it. However, if you pay support to your ex, you may have the right to deduct the amount from your taxes.

While the above generally applies to married couples, the law also has protections and regulations for common-law couples. No matter your circumstances, you would be wise to seek legal counsel if you are heading for a breakup. A lawyer who understands how provincial laws relate to your situation may be of great benefit to your future.

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