Invest first, Love Later
Break Up With Me, Break Up My RRSP
Broken Hearts and Broken Investment Portfolios: What Alberta Couples Should Know
Dividing An Investment Portfolio In An Alberta Divorce
Divorce does not just end a marriage. It can also break up an investment portfolio.
Under Alberta’s Family Property Act, investments acquired during a marriage are generally considered family property. Equal division is usually the starting point, although the final result depends on the circumstances of each couple.
There are two important things to remember when looking at investments in an Alberta divorce:
- The investment may be family property regardless of which spouse purchased it or whose name appears on the account.
- The amount available for division may include both the original investment and the growth that occurred during the marriage.
A Simple Example of Investment Division
Consider a fictional couple, Mr. and Mrs. Johnson. They married in 1990 and separated in May 2026 after 36 years together.
Shortly after their wedding, Mr. Johnson purchased $100,000 in McDonald’s shares in his name alone. By the time the couple separated, those shares had grown to $4 million.
Because the investment was purchased during the marriage, its value would generally form part of the family property to be divided. Assuming equal division and no other complicating factors, each spouse could receive $2 million in value.
The fact that Mrs. Johnson was not listed as a shareholder would not automatically prevent her from sharing in the investment. Family property rights do not always depend on whose name appears on an account.
Couples with significant holdings should get advice about dividing investment portfolios in an Alberta divorce before agreeing to a settlement.
What Happens to RRSPs in an Alberta Divorce?
The same general principle applies when investments are held inside an RRSP. If Mr. Johnson’s $4 million in shares were held in his RRSP, the value accumulated during the marriage would generally still be family property.
This does not necessarily mean the RRSP must be cashed out. Depending on the settlement and applicable requirements, RRSP funds may be transferred directly to a former spouse’s registered account under a written separation agreement or court order. Structuring the transfer properly can avoid triggering an immediate tax bill.
It is also important to remember that an RRSP balance is not the same as cash. RRSP funds are tax-deferred, so their after-tax value may be lower than the number shown on the statement.
What About Investments Owned Before Marriage?
The rules are different when one spouse owned an investment before the marriage began.
If Mr. Johnson had purchased the original $100,000 in shares in 1989, before the wedding, that original value could qualify as exempt property.
However, he would need records showing what the investment was worth when the marriage began and tracing it into the shares or account that still exists.
The increase in value during the marriage is treated differently and may still be divided on a just and equitable basis. The precise outcome is not always a simple 50/50 calculation.
This makes old account statements, purchase records and transfer histories important. A lawyer familiar with property division after separation can help determine what may be exempt and what may be shared.
Before You Divide an Investment Portfolio
Investment accounts can involve tax consequences, changing market values and questions about when the assets were acquired. Two accounts showing the same balance may not have the same after-tax value.
Before signing a property settlement, gather complete account statements and records for any investments owned before the marriage. Avoid selling or transferring investments until you understand the possible legal and tax consequences.
If you are separating in Calgary and have investments at stake, speak with an experienced Calgary divorce lawyer about your options and the best path forward.
This article provides general information only and is not legal, tax or financial advice. The outcome of any family property matter depends on its specific facts.
Your Senior Lawyer
Christopher Bungay
Member of The Canadian Bar Association & Law Society of Alberta
Christopher Bungay is the senior family lawyer at Advantage Family Law in Calgary. He has practised law since 2003 and advises clients on divorce, family property and complex investment portfolio division. Learn more about divorce and investment portfolio division in Alberta.