Golden Girl Finance
 
Anna-Marie Lyons
Posts (30)
 
 

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Q&A: When a short-term marriage goes wrong and a young child is in the picture

December 29th, 2012 by
 

Q: I am going through a separation. I married him in 2009 and sponsored him (he was on a student visa). We bought a condo and he got his permanent resident card in 2011. He changed after that – became quiet and refused to get a regular job, even though he was done with his studies (an MBA). He did odd jobs paying for minimal money. We had our son in 2012 and he threatened to kidnap him, so we split almost immediately thereafter. My question is this: I bought the condo in joint name but made the down payment using my RRSPs. Obviously he gets half of the equity, but he has never contributed anything towards the mortgage and left me (and his son) while I was on EI earning less than half my regular income. From the $17K used from my RRSP for the home purchase, $6K was savings from before the marriage. Since I have to repay it back under HBP, shouldn’t I be allowed to deduct at least that $6K from the equity division? I think it would be unfair otherwise, as I would have to borrow money and pay him that - and still have to repay my own RRSP in 2 years’ time. To be noted, he wasn’t staying home to take care of children (he left 3 days after my son was born). Our marriage lasted only 2 years and 5 months and out of which, I had to run everything for the first 2 years and then even after getting his immigration papers he didn’t help. I also found out after our separation that when he married me he had lied; he was on an expired student visa (not active) and he never finished his BComm and got into an MBA university fraudulently! Please advise; I need all the help I can get.

Asked by W., Pickering, ON

 

Please stop and take a deep breath. 

You’ve been through so much that my heart aches for you.  It sounds to me like you are anxious to divorce and move on and I don’t blame you, but don’t be in such a hurry that you neglect yourself and your child.  With regard to your specific questions, the asset value in your home is the current market value less any debt, including what you owe to your RRSP homebuyers plan.  In addition, while in Ontario the family home is generally split between spouses, there can be relief in the case of a short-term marriage (less than 5 years). 

Whatever assets you brought into the marriage (such as your RRSP) remain yours.  Division of assets is restricted to growth of those assets during the marriage.  If he is now earning income, you may be entitled to support for your child and possibly spousal support. 

I do not have any knowledge of immigration issues and fraud.

You really need legal advice as soon as possible.  If you cannot afford a lawyer, I’ve referenced before the Ontario Government Family Law Information Centers.  This may be a good place for you to start but you will probably need further resources

Good luck to you. 

 

The intent of this article is general information with regard to the financial aspects of divorce and should not in any way be relied upon as legal advice.  Anna-Marie Lyons is a Financial Planner and not a Divorce Lawyer.

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Q&A: Determining your divorce date for splitting of assets

December 19th, 2012 by
 

Q: My wife left me July 1st, 2011. My company pension was about $300/month more than hers at the time that we separated. She has since gone back to work full time and her pension when we divorce will be higher than mine. Is it the day that she left upon which we calculate our divorce date?

Asked by Joe, Richmond, BC

 

The answer to your question may depend on when your divorce is filed with the courts and in which province.  A divorce is granted by provincial court, in your case the province of B.C., and B.C. is undergoing significant changes in an attempt to treat divorcing spouses in a fairer manner.  The new Family Law Act is scheduled to come into force in March 2013 and technically, once the law has changed, all divorces fall under the new law.  Practically, there will be a period of transition in cases that are in process. 

A pension is considered a family asset that is subject to division.  Under current law in B.C., the division of assets is based on the date of divorce; under the new law, the division will be at the time of separation and limited to the amount acquired or the growth during the marriage.  Property division already under way under current law will continue as such unless both parties agree to change to the new Family Law Act.  However, it is my understanding that pension splitting is one of the exceptions that will fall under the new Family Law Act immediately.  A divorce lawyer aware of the specific details of your situation would be in the best position to answer this question for you.  If you have not yet sought legal advice, you should do so immediately.

The challenge in divorce is to find a way to clear the filter of negativity, anger and blame and to be open to the idea that the person we once loved still has some capacity for goodness, kindness and fairness.  I wish you both a resolution that brings you to a place of peace with each other.

 

The intent of this article is general information with regard to the financial aspects of divorce and should not in any way be relied upon as legal advice.  Anna-Marie Lyons is a Financial Planner and not a Divorce Lawyer.

 

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Q&A: When one partner brings significant assets into the relationship

November 10th, 2012 by
 

My partner and I are not married but began living together when I was 4 months pregnant. Our son is now 9 months old. My partner owns a business and claims a very low income while I make over 100K/year. We each own rental properties: his purchased before we were together and worth about 500k if sold, mine purchased while we were together and currently worth its purchase price only. I have 60K in RRSPs (20K invested since we've been together) and a solid pension/benefits plan through work. He has no pension/benefits and has accrued about 100K on a credit line in the past year for our home purchase/renos. Should I think about a partnership agreement in the event we were to separate? I don't want to share my savings/pension unless we are together! Would I have to pay back half of his debt? We have no plans to split, but who knows?

Asked by Anonymous, Calgary, AB

 

An agreement between partners, whether common-law or married, is always best executed before the fact. Once a person has a legal interest in a property, there is no motivation for them to sign an agreement giving up those rights. No agreement will be valid unless they have independent legal advice and their lawyer will advise them not to give up their rights.

Under Alberta law, you are considered common-law because you live together and have a child together, and if you separate you will both have an obligation to your child and to each other for financial support. However property rights are not necessarily the same as if you were married. Under current legislation, what was mine is mine and what was his is his could apply. Then again there is the question of fairness: you have saved in your name while he has accumulated debt for the home you both enjoy. Would it be equitable to leave him with all the debt and you take all the savings? As for claiming a low income, your partner may be accumulating savings in his company instead, which is great for taxes but could leave you out in the cold if you separated.

My suggestion is that you meet with a legal advisor licensed in your province, on your own. Ask beforehand what the consultation fee will be and feel free to shop around. You will get an understanding of both of your rights and obligations. The next step would be a heart to heart with your partner to talk about your concerns. Understanding each other financially is a major relationship key. For example, if you hate debt and he loves leverage, you need to both understand when you are pushing the other out of their comfort zone.

By the way, I think you’re amazing! A new mom who has managed to juggle career, relationship, parenthood and buy a rental property plus save for retirement – give yourself a huge pat on the back!

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Q&A: CPP splitting after divorce

November 9th, 2012 by
 

My ex-husband and I separated in 1996 and the divorce became final in 1998. I understand that based on when we divorced, credit splitting had already become law. My question is: when will my ex be able to receive his share of my CPP? Is it when he turns 60 or when I turn 60? He is 10 years older than I am.

Asked by Jennifer, office clerk, Burnaby, BC

 

That’s a good question on a very misunderstood topic. Based on when you were divorced, you are eligible to a share of each other’s pension credits, unless your separation agreement stated otherwise (since BC is one of the provinces that allow spouses to opt out of this arrangement as long as both agree).

It works this way: each year that you contribute to CPP you accumulate credits. These credits are used to calculate your CPP payment at age 65. If you start your pension at age 60, the monthly payment is reduced. For the years in which you were spouses (married or common-law) only, he can have 50% of your credits and you get 50% of his. If you were earning the same amount in those years, then each of your credits would have been the same and there would be no change. If he was not working and you were, then your credits would drop and his would increase for those years and vice versa. Either one of you can request to have these credits split by providing a certified true copy of your divorce decree and basic information to Human Resources and Skills Development Canada without seeking the approval of your former spouse. An adjustment will be made to each of your credits for the years in question, which you can see on your CPP Benefits Statement. You both independently apply to take CPP, so it doesn’t matter when he chooses to take it.

If you were the lower income earner in your marriage, be sure to provide the documentation to split the benefits. If you were the higher income earner, request a CPP Benefit Statement to see if a request has been made by your former spouse to split your benefits.

Check this link for further information: http://www.servicecanada.gc.ca/eng/isp/cpp/cpptoc.shtml

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Q&A: Splitting a property after a common-law split

November 8th, 2012 by
 

I am in a common-law situation, but it has now gone bad. I made the down payment on the house and now he wants half of it. What do I do? He isn't helping in the house to fix anything, lazy man.

Asked by J., Oshawa, ON

 

My understanding is that in Ontario you may be at risk of splitting the value in the home in a separation if this was a long term relationship. Long term is generally defined as 5 years or longer. Each province has their own laws with regard to divorce and separation and they are not all the same.

It’s important to seek the advice of a legal expert licensed in your province. In Ontario there are Family Law Information Centers in a number of locations, including Oshawa, where they can provide you with information. They also staff an Advice Lawyer from legal aid who may be able to help you with your specific situation. The web link is: http://www.attorneygeneral.jus.gov.on.ca/english/family/infoctr.asp