Collaborative law: Your RRSP funds and divorce

On behalf of Gary Kirk of Kirk Montoute Dawson LLP posted in Collaborative Law on Friday, September 15, 2017.

Couples who plan for retirement together don’t usually think about the possibility of divorce. Sometimes, however, life throws a curve ball, and couples do separate. Collaborative law in Alberta paves the way for couples to iron out issues surrounding divorce — one being what happens to retirement savings in the event a couple divorces. 

RRSPs and RRIFs along with pensions are considered under the law as family property and so must be split evenly in the event a couple separates or divorces. The federal Income Tax Act allows funds in RRSPs and RRIFs to be rolled over tax free between spouses if the court orders it or if there is a written agreement of separation. However, things can get a little sticky since dividing the money in those plans with other assets may entail complex deliberations that could leave each person having to make up for the shortfall in retirement funds.

Couples separating in their late 40s or 50s have to think about retiring in addition to laying out a sizable amount of cash for the separation or divorce process. Negotiations can get a bit complicated. This is where an Alberta lawyer experienced in family and collaborative law can make a difference. 

A lawyer seasoned in collaborative law can provide the couple with solid advice on how to iron out issues like those surrounding finances in a divorce situation. He or she can help the couple make informed decisions on how to proceed without the need for court intervention. The emotional turmoil of separation and divorce can be somewhat curtailed when the separating couple agrees on the financial aspects of their separation, and a lawyer will help navigate those often choppy waters.

Source:, “What happens to your retirement savings in a divorce?“, Mary Gooderham, Accessed on Aug. 25, 2017

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