Separation or Divorce

What generally happens to assets when a couple separates or divorces?

This is not an easy question to answer as the laws are determined by the individual province or territory. In general, each spouse is entitled to a one-half interest in all property that is a “family asset.” A family asset is normally defined as any property “ordinarily used for a family purpose.” That is important because it stresses how the property was used and not ownership of the asset or whether the asset was purchased before or after the marriage. RRSPs and pensions are normally considered family assets. Legal counsel is generally needed to determine final allocation of family assets.

Is there anything I can do to protect my assets?

This is a difficult question to answer as the laws vary across the country. There are general rules and exceptions which make determination of what assets belong to whom difficult. There are steps that you can take to determine your share of the family property.

How do I avoid financial surprises after a divorce?

Although laws vary across the country there are still some common threads. If you both signed for a debt, a loan for example, you are both still liable for it even after a divorce. There are things you can do to avoid liability for joint obligations. You can pay off all joint debts before your divorce. Another action you could take would be to refinance any joint debts before the divorce to separate responsibilities for the debt. A well-drafted separation agreement will protect each party as much as the law will allow.