Divorce and Money – Our Guest speaker Maureen Catherine Tabuchi, LL.B., MTax discusses the impact of divorce on Business owners and individuals. Divorce can often have devastating financial consequences for one or both parties.

The majority of marriage breakdown occurs between September and New Year’s Day. In fact, the first Monday after Christmas or New Year’s Day is when married couples would settle on a split, and when September ends is when separations are most commonly agreed upon.

Divorce and separation can be a difficult time for everyone. It is important to know your rights, obligations, and options before making any decisions that will have an impact on you or your family’s future.

If you are going through a divorce or separation from your spouse it’s important to work with a law firm that understands what your going through. Maureen’s team of experienced lawyers provide legal services including negotiating and drafting Separation Agreements; Representation in Mediation or Arbitration; Legal advice about spousal support (alimony), child custody & access (Visitation), child support, property division, possession of the matrimonial home, equalization of assets; Family Law litigation including Parenting Plans (Parenting Arrangements) & Child Protection Orders (Child Custody); Enforcement proceedings under The Family Maintenance Act; Advice regarding related issues such as Matrimonial Property Division Tax Planning, etc.; Preparation for Court Hearings if required by attending court with our clients.

The majority of marriage breakdown occurs between September and New Year’s Day. In fact, the first Monday after Christmas or New Year’s Day is when married couples would settle on a split, and when September ends is when separations are most commonly agreed upon.

Divorce can often have devastating financial consequences for one or both parties. If you’re required to pay as part of your separation agreement or divorce, consider carefully which accounts to use.

The two most common savings accounts for Canadians are Tax Free Savings Accounts (TFSA), and Registered Retirement Savings Plans (RRSP).

Do Not Do Make a Withdrawal from Your Tax Free Savings Account to Pay for a Marriage Breakdown

When there is a breakdown in a marriage or common-law partnership, an amount can be transferred directly from one individual’s TFSA to the other’s TFSA without affecting either individual’s contribution room. 

The transfer must be completed directly between the TFSAs by the issuer. If you are in this situation, you must meet both of the following conditions: 

• you and your current or former spouse or common-law partner were living separate and apart at the time of the transfer 

• you are entitled to receive, or required to pay, the amount under a decree, order, or judgment of a court, or under a written separation agreement to settle rights arising out of your relationship on or after the breakdown of your relationship 

When these conditions are met, the transfer is a qualifying transfer and will not reduce the recipient’s eligible TFSA contribution room. Since this transfer is not considered a withdrawal, the transferred amount will not be added back to the transferor’s contribution room at the beginning of the following year. 

Also, the transfer will not eliminate any excess TFSA amount, if applicable, in the payer’s TFSA.