Divorce Financial Checklist Canada: Finances During and After Separation

Divorce and separation finances in Canada

A separation changes almost every part of a household’s money at once: accounts, debts, the home, registered plans, benefits and taxes. This page is the checklist for that period, from the first week after separating to the budget you live on afterwards, in roughly the order the steps come up. It is part of our guide to life stages and life events.

What a divorce itself costs (court fees, lawyers, mediation) is covered in how much a divorce costs in Canada. Support has its own tools: the child support calculator and the spousal support calculator.

The first week: documents and accounts

Property division and support are worked out from each spouse’s financial position, usually on the date of separation, so the paperwork matters early.

An account in your own name for your pay, a record of joint account balances, and a list of the household’s monthly expenses give you a baseline for both the negotiation and the new budget. A court can set aside transfers made to hide or run down family assets during a separation.

The financial to-do list after separation

The asset and debt inventory

Both spouses must disclose their finances, so a complete list saves time and legal fees.

Property division: how it works by province

In Ontario’s equalization system, each spouse’s net family property is their assets minus debts on the separation date, less what they brought into the marriage; the spouse with the higher figure pays the other half the difference.

What is often excluded from division

The matrimonial home

The usual options are to sell and split the proceeds, for one spouse to buy out the other, or to keep it jointly for a set period (often until children are older). A buyout is usually figured from the equity: market value minus the mortgage, with the departing spouse paid their share.

Qualifying for a mortgage on one income, spousal buyout refinancing and taking a name off the title are covered in getting a mortgage after divorce.

Businesses, stock options and pensions

• Business interests usually need a business valuator; whether goodwill counts and how future earnings are treated vary with the case.
• Stock options vested at separation are generally part of the property; unvested options may be divided in proportion to the time worked during the relationship.
• Pensions: a defined contribution plan is divided from its account balance; a defined benefit plan needs a value calculation (often by an actuary) and a division under the provincial or federal pension law that governs the plan.

RRSP, RRIF and TFSA transfers

When a marriage or common-law partnership breaks down, RRSP or RRIF money can move to the other partner's RRSP or RRIF with no tax if you are living separate and apart, the transfer is made under a court order or judgment or a written separation agreement dividing your property, and it goes directly from plan to plan (Form T2220); money paid out to you first is taxable income. How the transfer is done, and how TFSAs and spousal RRSPs are handled, is covered in splitting RRSPs in a divorce.

CPP credit splitting

• Credits earned while you lived together are divided equally, even if one partner didn't contribute.
• The division is permanent.
• Periods before either partner turned 18, after either turned 70, or while either received a retirement pension or was considered disabled aren't split.

You apply to Service Canada. How it affects each partner’s future pension, and how it differs from sharing a pension while still together, is covered in sharing CPP between spouses.

Support, children and benefits

• Spousal support depends on the income gap, the length of the relationship, each spouse’s role during it and the recipient’s path to self-sufficiency. The spousal support calculator explains the Spousal Support Advisory Guidelines.
• Child support is set by the Federal Child Support Guidelines tables plus shared special expenses; the child support calculator also covers how support payments are taxed.
• RESPs can stay with one parent, be divided or continue jointly; see RESPs for separated parents.
• The Canada Child Benefit is recalculated on each parent’s own income once the CRA knows about the separation, and is split when custody is shared; the amounts are on the CCB amounts page.

Updating beneficiary designations

In most provinces a separation or divorce does not by itself cancel a beneficiary designation, so an ex-spouse can stay entitled to an RRSP or insurance payout until the designation is changed. How designations work across accounts is covered in the beneficiary designation guide.

Protecting your credit

During a separation, joint accounts and joint debts keep both names on the hook. Common steps are checking your credit report for new activity, asking lenders to freeze or close joint credit, documenting every joint debt for the division, and keeping at least the minimum payments current. Afterwards, removing an ex-spouse from a joint account usually needs their agreement, and taking a name off a mortgage or loan means refinancing it.

Your new budget

Moving from a two-income household to one changes almost every line item.

Changing your name after divorce

Professionals and the timeline

A typical sequence: documents and your own account in the first week; a lawyer consultation and the full inventory in the first month; financial disclosure and the separation agreement over the next few months; then the property division and support terms. Under the Divorce Act, the usual ground for a divorce is that the spouses have lived separate and apart for at least one year, so the divorce application often follows the agreement.

Our estate planning guide covers rewriting a will after a separation, and prenups and cohabitation agreements covers agreements that set these terms in advance.