So what assets classify as matrimonial property and how are they divided?
In Alberta and throughout Canada, all assets acquired by a couple during a marriage are considered matrimonial property, and are subject to equal division. This includes pensions and Registered Retirement Savings Plans (RRSPs). It also includes debts. The law surrounding division of assets differs for common law partners.
Assets owned prior to the marriage are not considered matrimonial property if they were kept separate and apart from the marital estate. However, if these assets increased in value during the marriage, the additional value is considered matrimonial property.
Carefully examining all of your assets and debts is crucial in order to come to a fair and reasonable settlement.
The goal is an equal and fair division and distribution, and the Court’s default is a 50/50 split. Where things get complicated and where unequal division is likely to be approved, is when an asset is not divisible or it falls under an exemption (such as gifts, inheritance, insurance or court-related awards, or property acquired before the marriage), or if there is a unique circumstance, such as property held outside of the country.
First, both you and your ex-spouse must provide a full financial disclosure in order to properly calculate all of your matrimonial assets and debts. As a general rule, assets are valued at fair market value as of the date of trial or settlement.
If a valuation specialist or another financial expert is required, spouses may retain their own experts, or they may choose to work collaboratively to jointly retain experts, and share the expense of those experts and their reports.
However you add it up, this can be a detailed and exhaustive process and it requires a thorough examination and sound legal advice from an experienced lawyer who is independent from your ex-spouse.
In Canada, pensions and registered retirement savings plans (RRSPs) accumulated during a marriage are considered matrimonial property. This means they are divided equally between spouses during a divorce, regardless of which spouse's pension or retirement plan it may be.
This includes employer-sponsored retirement plans such as defined benefit plans, defined contribution plans, group RRSPs and deferred profit sharing plans (DPSPs).
If one or both of you had pensions or retirement plans prior to your marriage, the increased value during your marriage is also considered matrimonial property. It’s often necessary to utilize valuation experts to calculate pension values.
Business assets may include tangible assets such as real property and other fixed assets like vehicles and equipment, and intangible property such as stocks, bonds, leases and intellectual property. All of these assets collectively contribute to a company's book value and market share value.
With so many elements at play, properly valuing a business is not an easy task. Regardless whether you and your spouse own a portion or 100% of a business, it’s important to consider the future of the company as you divide the assets. Is the objective to dissolve the business or to transfer ownership solely to one spouse? Will you both continue working together? Will you both continue to hold interests in the company?
We’ll help you determine the answers to these questions and more.