Reader Question:Do I Have To Share My RRSP With My Spouse When I Get Divorced?

Another reader of the Canadian Budget Binder blog asked the question, Do I have to Share my RRSP with my Spouse When I get Divorced”?

In Ontario there is the Family Law Act. In simple terms all property acquired after the date of marriage, up until the time of marriage breakdown is deemed to be the property of both parties. The ownership of the property is not a factor. So in short each person is entitled to 50% of the total family property.

There are certain exceptions like the family home that was brought into the relationship or received as a gift or inheritance. However to keep things simple we will ignore this.

RRSP’s, Stocks, Bonds, Pensions, are all subject to being included under Family Law. So if one spouse had a significant RRSP and the other nothing then the spouse with nothing would be entitled to 50% of the spouse’s RRSP.

Note: the courts adjust the value of the RRSP down, by the amount of withholding tax that would be payable if the RRSP were cashed in. So the figure used is less than fair market value of the RRSP.

To understand this fully the courts ask each person for a statement of assets and liabilities at time of marriage and time of marriage breakdown.

In effect they are doing a net worth statement at two points in time. This is known as net family property (NFP) and the spouse with the RRSP would include it as part of their NFP.

The spouse with the higher NFP would then be required to make an equalization payment to the other spouse so that both share 50-50.

This payment does not have to come from the RRSP or a transfer of the RRSP to settle the payment obligations. It can actually come from any assets owned by the individual with the higher NFP.

Hopefully this gives you some insight on your question about an RRSP and Divorce. To learn more about Family Law, Division of Assets and calculation equalization payments visit Feldstein Family Law Group .

Every attempt has been made to be accurate but Errors and Omissions Excepted.

Have you been through this experience? What did you learn?-Mr.CBB

 Gary Gorr

Guest Post: About Gary Gorr: What kind of written plan do you have for retirement that ensures you won’t outlive your money? I help people answer that question Contact Information: (905) 202-8430 ext.626 or you can follow my blog at Gary’s $$$ and Sense 

It's Not About How Much Money You Make It's How You Spend It

Are you NEW to Canadian Budget Binder?

If you are new Start here!

Grocery Game Challenge Rules

Do you have a Question for Mr.CBB please click HERE to ask him!

You can Follow Canadian Budget Binder on Twitter HERE or Facebook HERE and Pinterest Here. 

You can also subscribe to Canadian Budget Binder so you don’t miss a blog post. Fill in your email address on the HOME page of the blog off to the left where it says “Subscribe Via Email”- No Spam, I promise!

Are you on Mr.CBB’s Blog Roll? Check HERE… if not and you want me to check out your blog and add you, come introduce yourself.

If you want to write a Guest Post for Canadian Budget Binder start here!


  1. As Jason stated above, the rules here in the U.S. regarding retirement savings are very similar. Typically anything that is earned after marraige is joint property – which is how it should be IMO. Great info!

  2. Wow, I hope I never have to deal with a similar issue. It would seem really unfair if one party was a big saver and the other a spender and they got to split everything.

  3. worksavelive says:

    Great information, Gary! Here in the US many employers can separate a 401(k) at the time of divorce; I think it has to be ordered by the court or something along those lines but it is possible. I think separating it as quickly is possible is best simply because then you won’t have to deal with it down the road. Furthermore, here in the US you can use other assets to split half of the worth without giving up your retirement plan. For instance, if you have $250k worth and only $50k in your 401k, then you just have to make sure your spouse gets $125k in some way…therefore it doesn’t necessarily have to come from your retirement plan.

  4. John S @ Frugal Rules says:

    Thankfully I’ve never been through this myself and really don’t plan on it either. My parents did though when they went through divorce and had to split things 50/50. I’ve also seen others go through it can be a sticky situation as many will try and hide what they have in order to not have to pay as much out.

  5. Thanks for sharing, this is interesting to know, especially the part about rounding down based on withholding tax.

Add Your Comment


This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: