Owning and Owing gets equalized while undergoing a divorce: Benefits the old age plan too

Asset Settlement during divorce
Asset Settlement during divorce

When you file for a divorce case, remember that your asset will be equally distributed amongst you and your partner. This is what is there in Canadian Divorce Law which ensures that both the people share the assets and liabilities too.

How are the net assets calculated?

The first and foremost step is to calculate the individual assets built up by the spouses ever since they got married till the date of separation. The value of liabilities is subtracted from this value.

If you have considered all the property one had earned before marriage too, then you will be deducting the asset value from the resultant you got from the above calculation.

Any gift or inherited property or even personal injury awards should be kept away from this calculation. The final calculation gives you the net asset value.

How does it help your old age plans?

If you and your spouse had a joint pension plan and if you quit the plan early then you will be losing on the major benefits you could have received out of this plan. An employer will provide you with a minimum amount of pension which starts as late as at the age of 65.

If you quit your current employer then you must make it a point to switch this money to RRSP wherein the money would be self-directed.

The point to be understood is that the transfer of less than 50% of the money is required.

Hence expert divorce lawyers suggest that this plan should never be made a part of asset settlement as it never includes the inflation rate. No indexing of future inflation is included in the pension plan if you transfer the money.

In fact while considering the pension plan for settlement the spouses should emphasize on showing the results of both pre-retirement indexing and full retirement indexing.

Hence, the provinces of Canada have a beautiful settlement plan, provided you consult an experienced and expert attorney or a lawyer.

Someone who has been handling such cases for years will not only help you with the correct settlement process but will also give you a piece of advice on your present financial planning as well as secure your golden days too.