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  • Pension equalization "income tax deduction"

    Can anybody here explain why opposing counsel wants to lop off a quarter of the "family law value" of my ex's pension as "income tax deduction" before equalizing it? Is this normal, or is opposing counsel attempting yet another underhanded way of screwing me over?


    I'm trying to respond to an odious reeking Request to Admit, and I'm forced to be self-represented at the upcoming two-week trial.

    Her pension is the only asset that she didn't manage to dispose of before announcing the split.

  • #2
    FAQ Marriage Breakdown - GML Actuarial Services - Actuaries in Ottawa Gatineau

    Tax will be payable on cashing it in for equalization, but ensure they get a proper valuation for family law division.

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    • #3
      If there are no assets, what is it you're going to trial over?

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      • #4
        I've got an official-looking valuation from the Ontario Teachers' Pension Plan, and something from an actuary saying her tax rate would be 24.1%

        So it is only 75.9% of the pension that is split, with her keeping her half of that + the 24.1%?

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        • #5
          She was the primary breadwinner, keep the LOC maximized for years over my protests, then abandoned all the joint debts and the fully-leveraged house to me, taking her income and the kids with her, and started spewing false allegations and keeping the kids from me.

          Over the past three years I have wasted what little RRSPs I had on fees for useless lawyers, went bankrupt, lost my job, found another one far away, got sentenced to probation by a kangaroo court swayed by her perjury and not swayed by my 16-year-old son's truthful testimony, had the "Family" court take my home for no reason other than that she demand it of them, and am now trying to become a facsimile of a family law lawyer evening and weekends.

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          • #6
            In short, going to trial as a last-ditch attempt to reinstate my parenthood, limit the further damage to my three children, and begin the process of healing my daughter who has been successfully alienated from me.

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            • #7
              Originally posted by FormerFather88 View Post
              Can anybody here explain why opposing counsel wants to lop off a quarter of the "family law value" of my ex's pension as "income tax deduction" before equalizing it? Is this normal, or is opposing counsel attempting yet another underhanded way of screwing me over?


              I'm trying to respond to an odious reeking Request to Admit, and I'm forced to be self-represented at the upcoming two-week trial.

              Her pension is the only asset that she didn't manage to dispose of before announcing the split.
              That sounds about right to me. When I was looking at equalization, that was a consideration. Think of it this way.... The pension may have a FLV of x$... but if it was actually paid out to the person, they would not receive that much money... income tax has to be paid. What will be the cash in that persons pocket at the end of the day? (at least thats the way I looked at it)
              I remember finding some powerpoint slide for a lawyers conference (can't find it now) that outlined some examples of the splitting considerations for pensions, and for teachers/firefighters etc it was something like a 25% reduction. Other professions could range from 15%-20%

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              • #8
                OK, thanks. I just don't see why it needs to be taxed before moving it to something like a LIRA.

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                • #9
                  Originally posted by FormerFather88 View Post
                  OK, thanks. I just don't see why it needs to be taxed before moving it to something like a LIRA.
                  I dont think it gets taxed.. its that it WILL be taxed. So for the purposes of doing the equalization you are trying to tally up all the current cash values of the assets (at least thats my understanding)
                  Last edited by joehobo; 03-29-2015, 01:35 PM. Reason: clarity

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                  • #10
                    Originally posted by joehobo View Post
                    I dont think it gets taxed.. its that it WILL be taxed. So for the purposes of doing the equalization you are trying to tally up all the current cash values of the assets (at least thats my understanding)
                    heres the document I was reading... I think the tax consideration is for determining how to split it up.

                    http://www.cbapd.org/DocViewer.aspx?id=4477&region=ON

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