Crocodile Dundee: The Paul Hogan Divorce

Paul Hogan, best known for his role as Michael "Crocodile" Dundee, recently finalized his divorce with his former spouse Linda. According to TMZ, Paul will be keeping the rights to the "Crocodile Dundee" character and ownership of the home located in Venice, California.

Paul, however, had to open up his vault for his former spouse as he will pay Linda a lump sum payment of $5.775 million. Yes, I attempted to make the number look smaller than it is, in case you were wondering, that is an astronomical $5,775,000.00. Linda also has the right to remain living in the Venice house until 2018 or until she remarries. She also retains the option to purchase the luxurious home from Paul for $1.59 million - the original purchase price. In short, Linda will not only strike it rich by landing a lump sum payment, but she will also be able to purchase the Venice home for the original purchase price and then, if she desires to, resell the home for a further profit.

Moving past the financials of their separation, the former couple will share legal custody of their 15 year old son, Chance, with neither party paying child support.

Lastly, neither Paul nor Linda will be required to pay spousal support.

A few aspects of this divorce are important from an Ontarian family law perspective:

The Lump Sum Payment

In Ontario, there are no tax consequences related to a lump sum equalization payment. Thus, the lump sum payment of $5,775,000 will be received in whole by Linda. One must be careful, however, not to confuse the above with the tax consequences relating to spousal support payments. In Ontario, spousal support is only taxable if it is periodic and pursuant to a written agreement or court order.. A lump sum payment of spousal support is not tax deductible for the payor and is not tax inclusive for the recipient.

Shared Custody Arrangement

The term "custody" is often misunderstood. In Ontario, it is important to distinguish between

  1. sole custody;
  2. joint custody; and
  3. shared custody.

Sole custody means that one parent has the right to make all major decisions about the children. Similarly, joint custody means that both parents will make major decisions about the children. On the contrary, shared custody means that a child will live with either parent at least 40% of the time.

Although a child's living arrangement may, and often does, coincide with a sole custody order, this does not necessarily have to be the case. When a court orders that a parent have sole custody of a child, this only means that the parent will have the responsibility/right to make all major decisions with respect to that child.

According to TMZ, Paul and Linda will have shared custody of Chance. Chance will spend at least 40% of the time with each parent. Furthermore, special provisions will apply to calculation of child support in a shared custody arrangement.

The Absence of Child Support

In Ontario, the framework for deciding the amount of child support to be paid is governed by the Child Support Guidelines. Child support is determined based on the annual income of the payor and the number of children who are entitled to support. The court, however, also may exercise its discretion to alter the amount to be paid in limited circumstances, such as undue hardship or a shared custody arrangement.

In the case of Chance, a shared custody arrangement exists and the amount of child support payable would be determined after a more complex consideration of factors. Often the courts will calculate the amount of child support to be paid by each parent as if they were the payor and then make an Order for child support to offset the difference between such amounts. The reasoning underlying this process is to ensure that the child has a similar standard of living when residing with each parent. In this case, an Ontario may determine that the special circumstances present permit no child support to be payable by either party.

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