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Separated with no Agreement

I have a new client who became separated in Feb/2020. Spouse will not sign agreement and my client is paying mortgage and utilities while he is living elsewhere due to work. As he will not be allowed to deduct the expenses as support, are there other deductions I may be missing for him? I realize it may be a stretch.

Thanks,

You are correct there is no deductions available… until it is ordered by court/agreed in a separation agreement.

Your client is choosing to pay for mortgage and utilities whilst choosing to live elsewhere… CRA does not provide tax breaks for such choices.

IMO…Your client needs to seek out a legal team and follow their advice… this is really not something you should get too invested in.

Agree with rachelavryl.

He needs to consider choosing to pay for legal advice to help himself.

If he does not provide you with documents you can use, in tax preparation, that’s the way it is.

He is very reasonable and is close to retirement. Children are adults and out of the picture. I wanted to make sure I was not missing anything.

Thanks

There is an agreement but the spouse won’t sign it? That’s what lawyers are for. Obviously the pain of paying and not getting a deduction is not high enough for your client to act. Maybe a psychologist is needed before a lawyer.

To be fair, some people are indeed reasonable and tend to want to work things out, come to agreement and THEN go to a lawyer, saving considerable amounts of money and heartbreak, and paving the way for some method to move forward. My ex and I did that twenty-odd years ago, with a house and two tween-teen kids. Was it hard? Yes. Was it reasonable? Yes. Total cost for BOTH of us: $2,000 legal fees to document what we’d decided.

It can actually be done.

But, to the tax point, yes - he will need a written agreement before any deductions can be made. Some spouses WILL agree to do it one year at a time, so as not to lock themselves in. Perfectly acceptable. The alternative is to stop paying and wait, banking the money against the day repayment will be needed.

True. My comments were only half tongue-in-cheek. I’ve found myself coaching clients through these situations at various times. I find that moving a client toward a lawyer helps just so the client knows his/her options.

The tend here is for couples to go through mediation (service offered by lawyers) to avoid the confrontational scene. Often, when the separation is not officialized, I’ll show the couple the results of filing separated or not on their taxes and they will chose filing for the best results.