Getting to yes: best options for dealing with childcare expenses
By Rob Lamberti, AdvocateDaily.com Contributor
Shinehoft, principal of Toronto family and personal injury firm, Shinehoft Law, says using mediation or collaborative law allows the parties to work out a pact to meet the financial needs of their children. In comparison, she says, a court will impose what it believes is necessary with little or no input from the parents.
Parents should be aware that there are two types of expenses for children: basic and extraordinary, and she recommends they seek guidance because it’s often more complicated than people think.
"I always raise the issue of special or extraordinary expenses, and ask, 'Do you think this is going to be an issue?'" Shinehoft says. "And then we progress accordingly, depending on the unique facts of the case and the parties involved."
"It depends on the couple, and each case is different," she explains. "But those two options are often best for couples who are keen on having input into how the resolution will be crafted. They can communicate their wants and needs, and design something that will work for both sides. You don't get that in court."
Special expenses for children can be contentious in a dissolving relationship, Shinehoft explains.
Extraordinary expenses cover costs beyond the basics, such as clothing, shelter and food. But anything that's not standard — including orthodontics, medical expenses not covered by OHIP or extended health insurance, daycare, summer camps, tutoring, private schools and post-secondary education, and sports — are considered special, she says.
"These are things that will usually be negotiated between the parents," Shinehoft says.
If talks between the couple and their counsel fail, it could end up in court, she says, which is "never a really good idea because judges often make arbitrary decisions without much input from the parents."
The best way to avoid that is to opt for collaborative law or mediation to work out an agreement, Shinehoft says.
"They can come up with an arrangement in a separation agreement," she says. "There will often be a clause outlining how the parties will pay their share of expenses."
She says a clause could be included that requires one parent to consult with the other — and receive consent — before taking on a special expense, to determine if it's reasonable.
"Reasonable would be based on their lifestyle and how much the parents earn," Shinehoft says. The test includes whether the new special expense would "be part of the normal progression had the parents stayed together."
She says it's important for separating parents to include clauses in the agreement that look forward and allow for adjustments to childcare provisions to cover unforeseen expenses, and also that the document is reviewed from time to time.
"Things change along the way," Shinehoft says. "At the point of separation, it may be the kids are young and don't have any special expenses, but as they grow older, that could change dramatically.
"You can be as creative as you want in a separation agreement," she says. "I've seen clauses stating that at the time of the agreement there were no special expenses, but in the future, a specific list of items may be included or that particular items will never be considered as extraordinary expenses."
In general, Shinehoft says going to court is the "worst option" for couples because it is an expensive and lengthy process.
"If there is a great deal of contention, I often recommend that parents seek the help of a parenting specialist to help them hash out the parenting plan,” she says.
Mediation can also work well for certain people, Shinehoft says. But whichever resolution process is used, she says working with a specialist can help break through any barriers that are causing issues.
"Collaborative law, which uses family and financial experts as part of a team, is a smoother and more respectful way because you're working as a group," she says. "Mediation involves a neutral third party going between the two parents trying to facilitate an agreement."