One of the hardest things to hear from a client is “My marriage is ending”! Unfortunately there have been times when I was told about it before the partner or spouse. All the changes that happen during a separation or divorce are significant but one that usually causes contention is the Finances. And, most experience significant financial changes.

It’s always a good idea to have a Financial Plan but when you separate or divorce, it’s a GREAT idea. Having a complete list of all of your accounts and the property you own jointly and separately, with your debts and expenses will only help in the planning of your new reality.

Property can include (but is not exclusive too):

  • the home you and your spouse shared
  • any other real estate, such as rental or vacation property
  • contents of your home, such as furniture, electronics, appliances, jewelry, books, collectibles and art
  • cars and other vehicles
  • savings, such as bank accounts and cash
  • investments, such as Registered Retirement Savings Plans (RRSPs), Tax-Free Saving Accounts (TFSAs) or Registered Retirement Income Funds (RRIFs)
  • Insurance policies and pensions.
  • You should also write down the names of your financial institutions and account numbers for your chequing and savings accounts, credit cards, loans and investments. Keep copies of all important financial information, such as current statements for outstanding loans, recent pay stubs and your tax returns for the past three years.

Gathering this information will be helpful later when you are working out how to divide your property if you do not have a prenuptial or cohabitation agreement that predetermines these issues.

When my clients have faced this situation I always ensure that we do a NEW Financial and Investment Plan for them. Fresh eyes and circumstances help with the new reality – (whether they have more money than they are used too or when they have less and are supporting two households).  While legal advice is often essential, don’t leave out the consultation with your Financial Advisor and Accountant. They can help you understand the financial and tax implications related to separation and divorce.

You didn’t plan for a divorce but you can plan your Financial and Investment future to accommodate the new reality. My job is to help you do that.

 

This article is supplied by Kathryn Finn, an Investment Advisor with RBC Dominion Securities Inc. (Member–Canadian Investor Protection Fund). This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article. Kathryn Finn can be reached at 416-974-2535 or kathryn.finn@rbc.com.

 

 

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