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Financial Issues This forum is for discussing any of the financial issues involved in your divorce.

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Old 07-18-2012, 09:15 AM
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Default Vanishing RRSP's..

Two years ago wife of 25 years left the marriage and family home. We are completing separation statements at the moment which is straightforward apart from her RRSP declaration for sep. date which shows $8.000. I have a copy of an email that she wrote to her parents the year before which says that she had $55.000 in her RRSP's at the time. A chunk of the funds were from an inheritance which was promised for our daughters education that she decided to keep for herself and which I am now asking her to release for that purpose.

She may have cashed out her RRSPs taking the tax hit as part of her pre-evacuation planning. We each have a lawyer who will review the said agreements prior to the (what I hope will be ) do- it- ourself divorce. My question is, as RRSP's are regarded as family assets, where can the money have gone as there is nothing like that amount showing up anywhere else in her savings columns of sep. document and at the time she made no major purchases, do I have any recourse. Thank you.
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Old 07-18-2012, 09:28 AM
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Yes, RRSP's would be considered marital assets.

If the other spouse unilaterally depleted marital assets, and you can prove it, you could likely account for it in the equalization of other marital assets.

In your case, if the ex removed $47,000 from the RRSP account, of which you would be entitled to $23.5k, you could likely argue that the ex get a lesser amount of the matrimonial home to equalize the difference of their withdrawl.

But you have to understand there is a cost/benefit analyse that must be done. If you are looking to get a smaller sum, you have to figure how much legal fees may cost you to obtain that sum.

But I wouldn't argue so much that the money be returned....that isn't likely to happen. I would argue that the ex unilaterally used marital assets for their benefit and as such, their equalization should be reduced by an amount equal to their withdrawl.
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Old 07-18-2012, 05:33 PM
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but if it was an inheritence then isnt that considered just her property considering she didnt mingle it with joint funds??
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Old 07-18-2012, 06:18 PM
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Partly inheritance funds plus gifts and her own money went into the RRSP of my wife, some of which could be substantiated, most of it not.

I am no expert here, proven inheritance in savings accounts (I gather) are yours and not split. Is it the case that when funds go into RRSP's they become 'marital assets' wherever the money originated from.
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Old 07-18-2012, 08:19 PM
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Initially I though no - but google search results are split. Might be good to find an actual CANLII case covering this situation.

Last edited by dinkyface; 07-18-2012 at 08:32 PM.
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Old 07-18-2012, 08:28 PM
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Thank you, what is a CANLII case?

Last edited by Henry; 07-18-2012 at 08:33 PM. Reason: incorrect reply
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Old 07-18-2012, 10:01 PM
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CanLII - Canadian Legal Information Institute is the database of court cases in Canada. You search for terms that you are interested in, and it lists previous court orders that include them. Very useful for finding legal precedents.

In your case, you might want to read up on equalization, RRSP, inheritance.
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Old 07-19-2012, 09:09 AM
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Was the inheritance the ex's or the child's?

Were the inheritance funds co-mingled in her main RRSP fund which she contributed to with her income?

It will make a difference if she kept the inheritance separate, or joined it with matrimonial accounts.
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Old 07-19-2012, 11:18 AM
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The inheritance was left to my wife by a relative 5 years ago. Since our daughters were born , the first 20 years ago, the amount was promised by my wife for our two daughters educations. The amount was $48k. When the time came and the money received, my wife spent some of it on the house some on personal items and kept the rest (approx. $25k) in her own accounts and finally in RRSPs. Our finances were very straightforward, earning similar incomes, we each had our own accounts and a joint one for expenses. The house is paid off and we saved for things like new (second hand) cars etc.

We did not take advantage of the government schemes to save for education as we knew there would be the relatives money coming.

Then things changed and she left, leaving me with (initially) both daughters . My wife then decided that we could pay for university tuition out of our incomes and without much of an alternative, I went along with it for the first year. Now she is asking for my half of tuition again at a time when, as now a single parent, it is not easy. Thank you again for your replies.
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Old 07-19-2012, 11:31 AM
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What is the custody arrangement with your ex?

You say you are a single parent and initially leaving you with both daughters. Do you have the children more than 60% of the time? Whether you do may impact your ex's obligation to pay child support.

Post secondary education is an extra-ordinary expense covered under s7 of the guidelines. Generally how it works is the child is obligated to pay 1/3 of their education either through savings, bursaries/scholarships etc. The remaining 2/3 is split proportionally by income between the parents. If the child lists your address as their residence, you are still entitled to receive c/s for that child while they are away at school. However, it is generally suggested that you only keep the minimum amount to maintain the costs associated with maintaining their room and forwarding the rest to the child for their expenses.
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