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 ggorr@ifcg.com or you can follow my blog at Gary’s $$$ and Sense 

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5 Unusual Places to Stash Cash at Home

Stash Your Cash The Smart Way

It is always good to have a stash of cash around the house in case of emergencies or unexpected scenarios where debit cards can’t be accepted. Leaving money in a house does bring with it the inherent danger that it could be found by a less than trustworthy relative or discovered during a break-in.

These risks don’t exist with banks, but money isn’t as easily accessible at banks either.  Luckily people have hidden money in their homes for millennia so a few good, albeit unusual hiding places have been thought up. These five hiding spaces from We Know Savings may sound absurd, but they are likely the best hiding places anyone has ever thought up.

Inside fake plants

Photo Credit:  Marcelo Moura

Fake plants are a perfect place to hide extra money. Nobody, burglars included, is going to go rooting through the “roots” (pun intended) of an artificial house plant. Most of these household decorations come with foam in a vase or pot to hold the “plant” in place. The cash doesn’t even have to be put into anything for protection since it isn’t real soil. Placing a handful of bills under the foam portion of the plant almost guarantees that the money will be there when you look for it, no matter how long you left it.

Under a kitty litter box

There are certain things in a home that most people will never want to mess with, no matter what their intentions are. Dirty underwear, used tissues and moulded food all fall under this category. Luckily for anyone who wants to hide their money kitty litter is also under this umbrella. The money should obviously not be hidden inside of the actual litter, and it should definitely be placed in a freezer bag just in case. Taping an envelope to the bottom of the litter box and sliding money into it is a great way to hide extra money.

Inside a curtain rod

Curtain rods are another unlikely target of anyone looking for money in a home.  Most modern curtain rods have ends that slide or screw off. Placing money into the rods and putting the ends back on provides an inconspicuous hiding spot that most people would never think to look in. Unfortunately this will likely not work with the old-time, skinny, metal rods that were so flimsy.  If the old rods are the only ones around a house it’s better to find another hiding spot.

Empty aspirin bottle

Photo Credit: Pam Roth

A pill bottle would seem like a terrible place to hide money. Reasoning would tell a person that if someone is looking to take their money, then they may have no problem taking their pills. Luckily aspirin doesn’t really have any street value, so stealing it would be unproductive of even the most frugal burglar. The fact that many aspirin and other headache medicine bottles are not clear also provides a great quality in a hiding spot. Just make sure not to let anyone get any aspirin on their own.

In the toilet

Photo Credit Marcos Agrelli

Toilets are another part of the house that even the most thorough criminal would likely pass up. Sure, someone may decide to use the bathroom, but luckily the toilet hiding spot is far more sanitary than putting it into the actual bowl.

Placing money in a watertight plastic bottle or even in a mason jar will keep the money dry. It can then be placed into the tank on the back of the toilet. Most people have seen movies where drug runners will hide their stash in the tank of the toilet, but no one really expects anyone to do so. The only people we could ever expect to be this thorough are the agents on “Law and Order”.

There are several areas in a home where money can be safely hidden. The more unusual the hiding spot is the more unlikely it is that the money will ever be found by anyone other than the person who hid it. There are literally thousands of spots around a home where cash can be hidden, but these are likely the best. If a person can find a hiding spot better than these, then their money will never be in any danger.

Contribution By: GenTM is a freelance writer and a blogger.

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