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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 01-15-2009, 03:04 AM
profoundly sad profoundly sad is offline
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Default starting the process...asset splitting

My apologies if this thread is showing up in the wrong spot. I'm new to this and have been trying to figure out how to start a 'new' post.....

My situation is: married 35 years, no kids. We own our home and have some savings, as well as self directed rrsp's (me) and a pension plan (him).
We started our lives together with nothing. Both of us have worked throughout our marriage and everything we have accumulated has been accumulated together.

After many struggles (another post for another time), we have finally admitted defeat and thrown in the towel.

Neither one of us wants to be vindictive. We just want to divide things fairly, quickly and as painlessly as possible.

I have been researching the last few days and find myself getting very confused. Some information I am seeing tells me that splitting up is going to cost us way more than we can afford. Other information tells me we can get a divorce for the cost of online forms (approx $300.00) plus court fees of approx $450.00. What is a realistic number?

We only just recently separated, so we have a year to go before we can actually file for divorce. At this point, I think the most important thing is the separation agreement.

I have downloaded a 'fill in the blanks' separation agreement.

Once we fill this out, do we have to have it notorized, or do we have to see a lawyer? What should we expect this to cost?

Should we download the divorce forms now or wait until closer to the one year date?

If we have both contributed the maximum to CPP for many years now, do we need to take that into account in the separation agreement?

So many questions. Hopefully, someone will have some answers for me.

Thanks for your time.
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Old 01-15-2009, 02:56 PM
profoundly sad profoundly sad is offline
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Question starting the process

Another question.
How do we go about splitting up the value of assets such as our home and RRSP's.
For the home - do we have to wait until it's sold and we know the final value before we can include it in the separation agreement? Or, do we get an appraisal and use that (or the most recent fair market value report?)
Do we use the current value of the rrsp or the end value (eg: If there is a GIC which was purchased at x% rate and is not due to mature for another year or two, do we split it based on today's value or its final value at maturation date?)
Pension plan - same question.
Looking forward to some advice
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Old 01-15-2009, 06:37 PM
FreeNow FreeNow is offline
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Default

Quote:
Originally Posted by profoundly sad View Post
Another question.
How do we go about splitting up the value of assets such as our home and RRSP's.

You each will complete a NFP (net family property)form. In it you will include all assets and debts that that are held by each of you. Joint items are split 50%

For the home - do we have to wait until it's sold and we know the final value before we can include it in the separation agreement? Or, do we get an appraisal and use that (or the most recent fair market value report?)

The value of the home is at the separation date. You can get a legal appraisal for about 350 or you can get a couple of real estate agents in to give you prices. If you can agree on the price you're done.

Do we use the current value of the rrsp or the end value (eg: If there is a GIC which was purchased at x% rate and is not due to mature for another year or two, do we split it based on today's value or its final value at maturation date?)
Pension plan - same question

These are done at present value and then backed out for expected rates of taxation. If your incomes are the same -no problem. Pick a discount rate for taxes. If your incomes are different you should get this done by an actuary. That is wise anyway because pension plans tend to differ. The actuary cost us about 200 each. Whatever tax discount rate the actuary uses for the pensions, use that rate for the RRSPs.

Looking forward to some advice

Good luck
FN
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Old 01-16-2009, 03:07 PM
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billm billm is offline
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With the exception of pensions and retirement, (see previous post), it is easy because you started with nothing, so you split the rest up by half.

Assuming you are getting along etc, it does not have to be complicated, but you should write it down.

For the big items (houses, cars, and debts too), the first step is to list each item, decide if you are keeping it and who, or selling/closing it. If keeping it, agree on a price, using a third party source if possible. For smaller stuff, like furniture just do a like exchange (I get the couch, you get the TV, etc) - write that down, but I wouldn't itemize each thing, just generally how you will split the chatels.

With the list you have to do the math and in the end everyone keeps what they want and one will have pay the other half the difference between the value of what you are each keeping (you can do this including debts too - just treat it as a negative, but you should close out all joint accounts).

For the house if you are selling it, you can assign a guess value now, but the fairest thing is to wait until it sells, then split whats left after the cost of selling it.

I did it this way, wrote up a letter of instruction for a lawyer (what accounts to pay off, where to get the money (I got a new mortgage for example), and what the payouts would be. I signed it and my ex signed it and the lawyer did as we asked. Note that this was a risk to some extent because a real separation agreement (which we are working on) requires independent legal advice, and to be witnessed, but we decided to move forward without that for the purpose of assets separation. We are now getting a separation agreement written up (jointly) and will get independent legal advice and witnesses to make it legal, but so far we have spent very little on lawyers.
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