| Document |
Why You Need It |
| Bank statements (all accounts) |
Prove balance at separation date |
| Investment statements |
RRSP, TFSA, non-registered |
| Mortgage documents |
Outstanding balance, terms |
| Credit card statements |
Joint and individual debts |
| Tax returns (3+ years) |
Income determination for support |
| Pay stubs |
Current income verification |
| Pension statements |
Value for property division |
| Property tax bills |
Real estate valuation |
| Vehicle ownership |
Titles, loans |
| Life insurance policies |
Beneficiary changes |
Tip: Make copies before separation if possible. Take photos of documents.
Protect Yourself Financially
| Action |
Details |
| Open individual bank account |
For salary deposits |
| Monitor joint accounts |
Watch for large withdrawals |
| Know all account balances |
Document everything |
| Understand monthly expenses |
Create budget baseline |
| Don’t hide assets |
Illegal and can backfire |
| Don’t dissipate assets |
Spending sprees hurt your case |
Financial Organization Checklist
Assets to Inventory
| Asset Type |
Information Needed |
| Bank accounts |
Account numbers, balances, statements |
| Investments |
RRSP, TFSA, non-registered, RESP |
| Real estate |
Properties, values, mortgages |
| Vehicles |
Make, model, year, value, loans |
| Pensions |
DB/DC pension, statements |
| Business interests |
Ownership, valuation |
| Valuable property |
Art, jewelry, collectibles |
| Cryptocurrency |
Wallets, balances |
| Stock options |
Vested and unvested |
Debts to Inventory
| Debt Type |
Information Needed |
| Mortgage |
Balance, payment, terms |
| Home equity line |
Balance, limit |
| Car loans |
Balance, payment |
| Credit cards |
Balances (joint and individual) |
| Personal loans |
Amounts, terms |
| Student loans |
Balances |
| CRA debt |
Outstanding taxes owed |
| Business debt |
Personal guarantees |
Property Division by Province
Equalization (Ontario and Most Provinces)
| Principle |
Application |
| Calculate net family property |
Assets minus debts at separation |
| Compare to NFP at marriage |
Growth during marriage |
| Equalization payment |
Higher NFP spouse pays half of difference |
Example:
- Spouse A: $500,000 NFP at separation, $50,000 at marriage = $450,000 growth
- Spouse B: $200,000 NFP at separation, $25,000 at marriage = $175,000 growth
- Difference: $275,000
- Equalization: Spouse A pays Spouse B $137,500
Matrimonial Home
| Rule |
Details |
| Special treatment |
Value split 50/50 regardless of ownership |
| Pre-marriage equity |
Often shared (unlike other assets) |
| Excluded from exclusions |
Can’t exclude inherited home if it’s matrimonial home |
BC uses “family property” rules that are similar but have some differences in how certain assets are treated.
Specific Asset Division
RRSP/RRIF Division
| Step |
Details |
| Calculate total value |
At separation date |
| Include in equalization |
Growth during marriage |
| Transfer tax-free |
Using T2220 form after divorce |
| Transfer to spouse’s RRSP |
No tax triggered |
Important: The receiving spouse will pay tax on eventual withdrawal.
TFSA Division
| Consideration |
Details |
| Part of NFP |
Growth during marriage included |
| Transfer options |
Cannot transfer directly to spouse |
| Contribution room |
Need to withdraw, spouse contributes to their own |
| No tax impact |
TFSAs are tax-free |
Pensions
| Pension Type |
Division Method |
| Defined Benefit |
Present value calculation, division order |
| Defined Contribution |
Account balance at separation |
| CPP |
CPP credit splitting (automatic on request) |
CPP Credit Splitting: Years of marriage = years of CPP credits that can be split. Apply to Service Canada.
Business Interests
| Consideration |
Details |
| Valuation needed |
Often requires business valuator |
| Goodwill |
May or may not be included |
| Closely-held companies |
Complex valuation issues |
| Future earnings |
Generally not included |
Stock Options
| Type |
Treatment |
| Vested at separation |
Part of NFP |
| Unvested |
May be divided proportionally |
| Exercised during marriage |
Included in NFP |
Spousal Support Considerations
Factors Affecting Support
| Factor |
Impact |
| Income difference |
Larger gap = more support |
| Length of marriage |
Longer = more support |
| Role during marriage |
Stay-home parent = compensatory support |
| Self-sufficiency |
Can recipient become self-supporting? |
| Age and health |
Affects ability to work |
Support Advisory Guidelines
| Marriage Length |
Amount Range |
Duration Range |
| 5 years |
2.5-5% of income diff × years |
2.5-5 years |
| 10 years |
5-10% of income diff × years |
5-10 years |
| 20+ years |
May approach 50% of difference |
Indefinite possible |
Child Support
| Component |
Details |
| Table amount |
Based on payor income, number of children |
| Section 7 expenses |
Childcare, medical, activities (shared) |
| Custody arrangement |
Affects calculation |
RESP Division
| Option |
Mechanics |
| Keep with one parent |
Transfer subscriber role |
| Split between parents |
Divide account |
| Continue jointly |
Both remain subscribers |
| Withdraw |
Grants returned to government |
Child Tax Benefits
| Consideration |
Details |
| CCB goes to primary caregiver |
Or split if shared custody |
| Update CRA |
Report separation |
| Retroactive adjustments |
Possible |
Tax Implications
Year of Separation
| Item |
Treatment |
| Filing status |
Can file as separated if apart Dec 31 |
| Spousal amount |
Prorated for year |
| CCB |
Recalculated based on individual income |
Ongoing Tax Issues
| Item |
Details |
| Spousal support |
Taxable to recipient, deductible to payor |
| Child support |
No tax impact for either party |
| Property transfers |
Can be tax-deferred between spouses |
| Principal residence |
May need to designate for each property |
Legal Process & Costs
Types of Divorce
| Type |
Cost |
Timeline |
| Uncontested/Joint |
$2,000-5,000 |
3-6 months |
| Mediated |
$3,000-8,000 |
3-9 months |
| Collaborative |
$10,000-30,000 |
6-12 months |
| Litigated |
$20,000-100,000+ |
1-3+ years |
What You Need for Divorce
| Requirement |
Details |
| Separation for 1 year |
Or adultery/cruelty |
| Marriage certificate |
Original or certified copy |
| Parenting plan |
If children involved |
| Financial disclosure |
Both spouses |
Budgeting for Life After Divorce
New Budget Considerations
| Expense |
Single-Income Reality |
| Housing |
May need smaller place |
| Utilities |
Now 100% your responsibility |
| Insurance |
Auto, home, life updates |
| Child expenses |
Ongoing responsibility |
| Support payments |
Paying or receiving |
Post-Divorce Financial Tasks
| Task |
Timeline |
| Update beneficiaries |
Immediately |
| Change will |
Immediately |
| Update insurance |
Within 30 days |
| Refinance mortgage |
As agreed |
| Remove from joint accounts |
As agreed |
| Update CRA |
Online or by phone |
| Update bank accounts |
Add/remove names |
Protecting Your Credit
During Divorce
| Action |
Why |
| Monitor credit report |
Watch for unauthorized activity |
| Freeze joint credit |
Prevent new charges |
| Document joint debt |
For division purposes |
| Pay minimum on everything |
Protect credit score |
After Divorce
| Action |
Details |
| Remove ex from joint accounts |
Requires their agreement |
| Refinance to remove name |
From mortgages, loans |
| Get own credit cards |
Build individual credit |
| Monitor for years |
Ex’s debt may affect you |
Working with Professionals
Who You May Need
| Professional |
When |
| Family lawyer |
Complex assets, disputes |
| Mediator |
Amicable split, cost savings |
| Accountant |
Tax planning, business valuation |
| Business valuator |
If business involved |
| Actuary |
Pension valuation |
| Financial planner |
Post-divorce planning |
| Therapist |
Emotional support |
Red Flags with Spouse
| Warning Sign |
Action |
| Hiding assets |
Forensic accountant may be needed |
| Draining accounts |
Seek court order immediately |
| Running up debt |
Document everything |
| Transferring property |
May be set aside by court |
| Quitting job |
Court can impute income |
Timeline Summary
| Phase |
Key Actions |
| Week 1 |
Secure documents, open own account |
| Month 1 |
Lawyer consult, full financial inventory |
| Months 1-3 |
Financial disclosure, separation agreement |
| Month 4 |
Property division, support agreement |
| Month 6 |
File for divorce (1 year from separation) |
| Month 9-12 |
Divorce finalized |
| Ongoing |
Review agreement annually |