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Divorce Asset Protection Strategies in Ottawa, Canada

Are you preparing for a divorce? If so, it is normal to have a lot of financial questions. A divorce can put your assets at risk. The good news is that there are proactive measures that you can take to protect your financial interests and set yourself up for a better future. Here, our Ottawa divorce lawyer highlights the key things to know about asset protection and divorce in Canada.

Background: Know the Law for Property Division in Divorce in Ontario

To start, it is important to understand how property is split in a divorce. Property division in Ontario is governed by the  Family Law Act. The value of property acquired during the marriage is divided in accordance with Ontario’s equalization scheme. Non-marital assets, meaning the value of assets that were owned prior to marriag are able to be deducted from a party’s net family property (with some exceptions, notably the matrimonial home). Gifts and inheritances received can also be excluded from the net family property calculation if the assets are dealt with appropriately. “Commingling” an inheritance can result in it losing its eligibility for a net family property exclusion.

Five Strategies to Protect Your Assets During a Divorce in Ottawa 

With asset protection, a proactive approach is essential. Here are five key strategies that you can use to help protect your property/assets during a divorce in Ottawa, Canada: 

  1. Know What is Excluded Net Family Property, a Date of Marriage Value Deduction, and what Assets need to be Traced to maintain their Exclusion: Understanding the difference between excluded property, marriage deductions, and especially what property cannot be deducted, is key in protecting your assets. In Ottawa, for example the matrimonial home can only be deducted from your Net Family Property value if you have a marriage contract. In contrast, an investment rental property could be a date of marriage deduction to your benefit even without any domestic contract.
  2. Take a Comprehensive Financial Inventory of Your Assets:  Create a detailed list of all your assets, including real estate, bank accounts, investments, and personal belongings. The inventory will provide you with a clearer picture of your financial standing and help you make informed decisions during the asset division negotiations.
  3. Keep Detailed, Accurate Records of Finances: Maintaining thorough and accurate financial records is vital to protecting your assets in a divorce. Keep track of bank statements, tax returns, mortgage documents, and any other relevant financial paperwork. Banks typically only keep records for seven (7) years, and this is often an issue for individuals who separate after a lengthy marriage.The onus is on the party claiming the date of marriage deduction to prove what the value of their claimed assets and debts were on date of marriage.
  4. Ensure Retirement Funds and Pension Plans are Handled Properly: Divorce can have a significant impact on your retirement savings. In Ontario, there are specific deductions and calculations for the division of retirement assets during a divorce. An Ottawa divorce lawyer can help you navigate the process and ensure that your funds are properly protected.  
  5. Try to Work Towards a Collaborative Solutions: While it may be tempting to adopt a combative stance during a divorce, working towards a collaborative solution can lead to a more favorable outcome for both parties. By engaging in open communication and negotiation, you and your spouse may be able to reach an agreement that protects your assets and minimizes the risk of protracted litigation. 

Contact Our Ottawa Divorce Lawyer Today

At RPB Family Law, our Ottawa divorce lawyers are committed to protecting the financial interests of our clients. If you have any questions about asset protection and divorce, we are here to help. Call us now or contact us online today to set up your completely confidential consultation. From our Ottawa law office, we provide divorce representation throughout the wider region in Ontario.