Breaking It Down: What happens to your assets in the event of a divorce?

Harry never saw it coming. He and his wife Karen had a beautiful paid-off home, as well as great jobs and money in the bank. Then one day Karen dropped a bombshell—she wanted a divorce.

What will happen to their assets now?


In the eyes of the law, all property, and thus all residences, are to be equally split in a divorce. This means it does not matter who was the primary earner or whose name was on the house in the initial purchase.

When navigating the division of their property, Harry and Karen must continue paying all relevant costs on the property. They must not allow the house’s financial upkeep to lag behind, and that includes keeping up with the mortgage, taxes, and bills.

Meanwhile, Harry and Karen are facing three options:

Sole ownership. In this scenario, either Harry or Karen will buy out the other. To do so, they will need to get the house appraised and establish the current market value. The spouse who decides to take on full ownership should ensure that he or she can cover the increased expense.

Sell. Harry and Karen can divide the profits of the sale between them, or as determined in their divorce proceedings. They will want to ensure that they receive good market value for their home, and not simply sell it as quickly as possible so they can walk away faster.

Co-own. Harry and Karen could choose to continue owning it together. A clear written agreement is essential, to outline what would now become a business relationship.


As with houses, retirement savings—registered retirement savings (RRSPs), registered income funds (RRIFs) and pensions—are to be divided equally. Harry and Karen are in their 40s and, while neither is looking to retire soon, both have a sizable amount saved up in these plans that must be divided now.

This is a complicated task. It’s important for them for them to consult a financial advisor along with their lawyer. A financial expert will help ensure an equal division of assets both when they sign the paperwork, and years down the road.

Divorce is a costly process, and both Harry and Karen will need to reevaluate their finances, and learn to spend within their new means. Cashing in on their RRSPs may be tempting to pay for the costs associated with divorce, but it should always be a last resort.

What is and what isn’t divided

While their house and retirement savings are Harry and Karen’s biggest assets, they will also have to divide up any and all assets that were acquired and used during their marriage. This includes cash, investments, value of a personal business, vehicles, household items, and more. What is not divided, unless spent as a couple, is the following:

Inheritances or gifts given to one spouse
Insurance settlements or proceeds
Anything excluded in a premarital agreement

Now what?

Harry and Karen have a lot to consider as they divide up their assets. To begin, they will each consult their own lawyers and financial advisors. They will be weighing their options and speaking to professionals to ensure they both receive a fair deal. To discuss your options, contact SafeBridge today.

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