Divorce does not just break your heart. It also breaks up your investment portfolio. According to Alberta law, investments that were acquired during a marriage are defined as family-owned property. This means that, after most divorces in Alberta, each spouse is entitled to 50% of any investments that were purchased during the marriage. There are two important points to remember about this 50/50 splitting rule:
- It applies regardless of which spouse purchased the investments, and
- It applies to the initial investment purchase, plus any growth in the investment
that occurred during the marriage.
The following scenario of a fictional couple demonstrates how this works: The Johnsons were married in 1990. They did not live together until after the marriage started. Unfortunately, things did not work out, and they separated in May 2026. Shortly after their 1990 wedding, Mr. Johnson bought $100,000 in shares in the popular fast food chain McDonald’s. These shares were bought in his own personal name. His wife, Mrs. Johnson, was not listed as a shareholder. On the date when this couple separated, the McDonald’s shares grew in value from $100,000 to $4 million dollars. In this scenario, as part of their divorce, Mrs. Johnson would be entitled to 50% ($2 million) of the total $4 million in McDonald’s shares.
50/50 Applies to RRSP Investments
Even if Mr. Johnson had purchased the McDonald’s shares within an RRSP, his wife would still be entitled to 50% of the value. While RRSPs protect your investments from being taxed while they grow over the years, RRSPs do not protect you from the consequences of divorce. If the $4 million in McDonald’s shares were held in Mr. Johnson’s RRSP, he would likely be required to transfer $2 million of these shares into Mrs. Johnson’s RRSP account as part of the divorce proceedings.
50/50 Does Not Apply to Investments Before Marriage
The 50-50 split rule does not apply to investments made by one spouse before the relationship began. For example, let’s say Mr. Johnson bought $100,000 in McDonald’s shares in 1989, the year before he married Mrs. Johnson. In this scenario, the original $100,000 investment would belong exclusively to Mr. Johnson alone after the couple separated/divorced. However, Mrs. Johnson would still be permitted to share in any growth in value of the McDonald’s shares which occurred after the day they were married. In other words, of the total $4 million, Mr. Johnson would get $4.1 million, and Mrs. Johnson would get $3.9 million (to account for the initial $100,000 investment made by Mr. Johnson before their marriage, which belongs exclusively to Mr. Johnson).
