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Ways to satisfy property division

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  • Ways to satisfy property division

    My spouse (soon to be ex) is incorporated. I am a shareholder of that corporation. Much of the marital assets that we have are inside an investment portfolio/brokerage account in the name of my spouse’s corporation. My spouse and I have agreed (per law) that half of the investment portfolio is mine when we divorce. Cashing out half the investments to satisfy is going to be a big hit tax-wise. So I thought some of you here may have some ideas on the following.

    My spouse will be the recipient of a sizeable legal case payout (cash) in mid-2021. That payout will be tax-free to my spouse. My understanding is that no "gift tax" in Canada and that any resident of Canada who receives a gift of any amount from almost any source (except from an employer) will not have to include this in their income. So what my spouse and I are considering is that instead of cashing out half the corporate investment account to settle matters with me that I will receive a gift in 2021 that will settle matters.

    Do you see any problems with this idea - accounting/tax-wise or anything else I am missing?

    Also, any ideas how to “secure” the amount I am owed/will get in 2021. Our one year separation will be up in early 2021, after which I guess either my spouse or I could apply for divorce (we are in Ontario). “Secure” both in terms of preventing my spouse from reneging on what we agreed and (to a lesser extent) secure upon my spouse’s death.


  • #2
    Any children?
    Spousal support?
    You can divide the assets as you choose and draft terms to indemnify you to secure the final proceeds get paid.
    You can also buy life insurance and get wills updated to reflect the division of assets.
    If the investments are corporate assets then the yield and sale proceeds will flow through the corporation. Will you remain a shareholder?
    If no then any disposition by you to your ex would be at fair market value.
    You need a good tax accountant to advise you further.
    PM me I can recommend.


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