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Legal separation and taxes

Posted in Barrie, Location, Ontario, Separation by Questions on March 11, 2014

My husband and I are going to sell our house and separate. We have two kids, both of which will be living with me. I want a legal separation, but he refuses to pay for the cost. I was told that if we do not legally separate, then all of the debt and bad credit he has after our “separation” will also be mine, and that we cannot file taxes on our own without this legal document. Is this true? So far it is an amicable separation, but given his financially record, I really do not want to be on the hook for any of his bad mistakes.

1 Expert Comment

  1. On March 5, 2014 at 7:57 am
    A Family Lawyer said:

    You should ask the real estate lawyer if he/she can distribute the sale proceeds without a separation agreement. If he/she says no, then you could agree to use the sale proceeds to finance the costs of the separation. You may be facing a situation where he will deduct his debts on separation from his assets and if you and him have joint assets and you have no debts then this may be unfair. You should therefore talk with a lawyer of your choosing about any grounds to argue for an unequal division of the value of property on the basis of his recklessly incurring debts. You are required to file tax returns. The Income Taxes Act does not state that spouses who are uncertain about separation do not need or are unable to file tax returns. You should phone Canada Revenue to ask about the document to file after living separate and apart for 90 days. CRA has its own rules and forms.

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