Divorce can be a costly endeavor. When a divorcing British Columbia couple shares a lot of assets, splitting up could mean having to rethink any retirement plans that may have been in place for quite some time. That process typically includes the division of property, and some financial guidance may be prudent.
Most assets in a divorce situation in Canada are divided equally. But the way in which they can be separated can be done creatively. Divorce changes the spending forecast, and older couples may need to keep that in mind moving forward.
Planning will give each a picture of the financial future. Some questions that could be asked are: Will the house be sold? Are there any children who will need support? How long will each be working? How do they view spending retirement years?
Couples also need to figure out the process for dividing Registered Retirement Savings Plans as well. When figuring the approximate worth of an RRSP, each is given a notional tax, taking into account an estimate of the retirement tax bracket of the holder. Income from an RRSP will be taxed as money is withdrawn. An actuary may need to come up with those figures.
Each divorce is different, and so each financial plan for a divorce will be unique as well. There is not just one way to split assets. Division of property can be complicated. In addition to enlisting the aid of a financial planner, it may be wise to get the advice of an attorney in British Columbia who is experienced in family law. He or she will be able to answer any questions regarding the legalities of a divorce situation as it pertains to finances.
Source: cbc.ca, “Divorce: splitting your assets means rethinking retirement plan – CBC News,” Accessed on Sept. 23, 2017
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