There is a general public misconception that during the divorce process, women get it all. Though I can’t speak for every single case, I would like to share my professional experience and personal observations.
The Financial aspect of divorce comes down to the following three major issues: financial well being of the children, spousal support and property division.
Financial Well Being of the Children
In the past, women (mothers) used to get full custody and primary parenting status. Men (fathers) would only have visitation rights. This would entitle women to 100% of the child support, the full amount of child tax benefits and all available tax deductions and credits.
Today, shared parenting is becoming more and more popular. As a result, child support is payable by both parents to each other, and all tax benefits are split. You can refer to the Government of Canada website for a quick and easy illustration. http://www.justice.gc.ca/eng/fl-df/child-enfant/look-rech.asp
Traditionally, women were homemakers (excellent ones!) and men were the income earners. In this scenario, a woman would often be entitled to receive spousal support. In order to get an idea on how much you would be entitled to, I recommend www.mysupportcalculator.com. However the issue of spousal support entitlement is very complex and legal advice is highly recommended.
As times have changed, so have women’s roles in the workforce. Many women are employed out of the home and may not be entitled to receive spousal support. In fact, many women find themselves in the position of having to pay support to their less financially successful husbands.
Often people believe that everything will be split equally. This is not necessarily the case. Pensions, inheritances, some insurance settlements MAY be excluded from division altogether. Since many assets can’t be physically divided, there are trade offs, offsets, direct rollovers and buyouts to make it more practical and economical.
It’s not unusual to have one spouse keep the matrimonial home, and the other receive a cash settlement for his/her share. The irony is often all friends and neighbors see is that “she got the house and the car”, instead of the real picture “the bigger mortgage and smaller RRSPs”.
If you and your partner are divorcing, don’t get confused by the myths out there. Get yourself organized, run many financial scenarios and avoid costly financial mistakes.