When a couple files for divorce, there are several financial aspects to consider:
- What will happen to the family home?
- Are there children who need financial support?
- Can you expect to pay or receive spousal support and if so, how much?
- What will happen to your retirement savings, other investments, and Canada Pension Plan (CPP) contributions?
There are no easy answers to any of these questions and it can be difficult to make the best decisions when you are going through the emotional turmoil of a divorce. Seeking financial advice prior to a divorce can help couples weigh their options and make informed choices.
Here are some important decisions you will need to make to get on the right financial footing. If you can work these out with your spouse before filing for divorce, the process will be smoother and less stressful.
- Create a plan to divide financial assets with a goal of minimizing the negative impact on the assets and on tax liability;
- Update your will to reflect your family changes;
- Update the beneficiary on your registered savings plans and insurance policies;
- If you have children, decide which spouse will claim the children for tax purposes;
- Address your joint debts; and
- Create a budget based on your new single income.
Speak to an advisor to discuss your financial options and start planning for your future.
The Government of Canada has information about how to apply for a divorce and a guide to parenting arrangements after separation or divorce.