Paying Equalization

[Cobourg]

I was ordered to pay an equalization payment at our trial.
There is no equity left in the house.
I can't qualify for a loan.

The only reason for the payment is due to my pension.
I am able to transfer funds from my pension to my ex but it requres a court order to do so.

My ex is unlikely to agree to this in a consent order.
She wants the cash.

What are my options?

[standing on the sidelines]

to me you should be able to just transfer it and if she wants to cash it in, then she can. It isn't like you are not wanting to pay it, your hands are tied on how you can access the money. She may just have to suck it up.

[blinkandimgone]

Someone please correct me if I'm wrong, but it's my understanding that once the agreement on equalization is made, it's up to the payor to decide how the transfer will be made.

[Mess]

Normally the payment would be "immediately" and most agreements/orders will instead stipulate a date, for example 30 days. If you can make a pension split within 30 days you can just do it, but ideally you should have it spelled out in the agreement.

The crux of it is, you need the court order to transfer the pension, if the ex doesn't agree to a consent order then what other choice do you have? You have to make your own motion order and explain why. If the ex fights this, you would have to explain that you could not raise the cash without selling the house which would take months anyway. You would also have to explain why you couldn't take out a loan.

[blinkandimgone]

Can someone explain why he would need a court order to transfer his own pension? Also why he would need the ex's consent for that?

[Cobourg]

The judge just made the ruling on Friday.
Have not even seen the paperwork yet. Just heard him read it in court.

We are both self represented with no lawyers to deal with the details.

Neither of us have any assets left.
All the house equity went to pay her credit cards and I have two lines of credit and credit card debt so I doubt I can get a loan and even if I could qualify, I don't know if I could make any payments after all the support.

The pension is my only asset and since that asset is the reason for the payment owing, it only stands to reason that I should use that to make the payment.

If she does not agree, I will have to bring a motion. I don't see any other way.

Also, if the judge wanted her to have "cash" wouldn't he have ordered a lump sum spousal support order?

[Cobourg]

Blink
My pension company requires a court order for the transfer.
Their rules.

I would either need the ex's consent for that or would need to bring a motion as Mess has suggested.

[blinkandimgone]

OK, the first part I understand, don't get why your ex has to consent to you getting a court order for that. That seems like a giant pain, especially if things aren't amicable at all.

[Mess]

She doesn't HAVE to consent, but a motion order will go through instantly if it's on consent. If she disputes it he has to go through that much more rigmarole.

[dadtotheend]

The court order is a requirement of the Income Tax Act.

I sure hope you discounted your pension assets for tax liabilities in your financial statement. If you didn't then you are paying too much in equalization as the pension withdrawal is or will be taxable when it occurs and taxes will have to paid.

You can cash out pension money to pay her but you will have to pay tax on it, so you will have to cash out our more than the equalization payment in order to net out at the payment amount.

She would be foolish to accept a spousal transfer as allowed under the Income Tax Act unless you grossed it up to allow for the income taxes.

How much is involved?

[Cobourg]

Dad,
My ex tried to get the pension valued at it's current value instead of date of separation.
Judge denied it.
She tried to get the judge not to allow me a taxable deduction due to future income tax.
Judge denied it.
I put a 30% tax on it and he let it through because she did not have an argument prepared for it.

The payment is for only $9,000.
My pension has gone up considerably since separation, so I don't mind paying that amount, PLUS another $3-$4K for her tax situation that she will have to pay.
The pension can't be cashed out. It can only be transferred and she can manage the funds and do with it what she wants.

[KeepSmiling]

I thought that the basic "default" position was that the equalization payment must be paid in cash.

If there is an agreement to take the cash payment "in kind" then that is up to the Payor and the Receiver to sort it out.

But the Receiver does not HAVE to agree to take the payment "in kind". (unless otherwise ordered to do so by a Judge, I guess)

[Cobourg]

KeepSmiling,
I have found that the "default" is usually a transfer of equity that is available in a home.
In other words "cash"
In our case there is no equity.
I have no access to "cash".
No assets other than the pension.

[KeepSmiling]

The law provides that the value of any kind of property that was acquired by a spouse during the marriage and still exists at separation must be divided equally between the spouses.

You don't have an ownership interest in your spouse's pension or other assets. Just a potential right to an equalization payment if they have more stuff (a larger NFP number) than you.

This payment may take the form of cash or other assets, such as the matrimonial home or RRSPs. “There are different ways to negotiate that settlement,”. “In the case of mediation or the collaborative practice, both parties have a say in that.”

I just found the above statements on various governement websites.

It seems that you have already settled the amount of the equalization payment, but not the form that it will take. That is the part that needs further negotiation - I don`t think that you can automatically assume that the equalization payment will take the form of pension transferred to her.

[valentine]

do you go to motions court to get a ruling on equalization if you disagree on who owes who