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Can my ex take my retirement funds or pension plan in a divorce?

Posted on July 24, 2019

When a marriage ends, deciding the equal distribution of assets to each person is a necessary step. Under the law, the value of any kind of property or assets that was acquired by a spouse during marriage and exists at the time of divorce must be divided equally. This covers pension and retirement funds.

Every divorce is different. Usually, the division of property and assets involves a spouse receiving an equalization payment. An equalization payment is money one spouse pays to the other to divide the increase in the value of the couple’s property during the marriage. The spouse with the larger value of property subtracts the other to find out the difference. That difference is then divided in half to determine the equalization payment that the first spouse pays to the other.

Generally, the maximum amount of the pension paid to the plan members’ ex-spouse is 50% of the value of the said pension.

lawyer explain benefits and recommend client to sign legal document.

Your retirement is one part of the division of assets

Your retirement funds are just one piece of property that needs to be considered in determining each spouse’s financial contribution. All property and assets need to be included in the calculation of how they will be divided.

Valuing your pension

Dividing pensions can be complicated, and some background research should be done first. You need to understand what type of pension or retirement fund you have and know if it follows federal or provincial law. Furthermore, is it a Defined Pension Plan (DPP), or a Defined Benefit Plan (DBP).

The valuation provides an estimate of how much each spouse will likely receive if the pension is divided. You can apply for this to be done by contacting the person or group who manages the pension and/or fund. You may be charged a fee for valuing the pension.

Splitting your shared property instead of your pension

You and your ex may decide instead that one partner may pay the other the agreed upon amount at the end of the divorce with money from another source or asset. You and your ex may sell your home for example, or simply transfer your interest in the home to the other. You could pay what’s owing to your ex from those funds or the transfer, rather than split your pension.

Dividing your retirement funds

If you’re already divorced and have received a court order, arbitration award or domestic contract, there may be rules on how your funds are divided. If that is the case, the fund or plan can pay out your ex immediately. Also, if your pension is in pay the fund is treated differently under the law.

When to seek advice

When splitting property and assets during a divorce, there are a few necessary steps you need to take. Talking to a professional family lawyer about your situation can offer clarity and prevent roadblocks. Chat with one of our divorce lawyers today for a free consultation on how we can guide you through the process.


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