Dividing and Protecting Investments in Divorce in Calgary
Calgary divorce lawyer focused on protecting and dividing investment portfolios which include stocks or real estate
PROTECTING WHAT YOU BUILT BEFORE AND DURING THE MARRIAGE
Your investments represent years of savings, investing and planning for the future. This applies to equity portfolios such as RRSPs and TSFAs, and real estate such as rental properties. In a divorce, protecting your future requires a lawyer with both legal and financial knowledge. Your lawyer must understand the basic concepts of investing to ensure your assets are valued and divided correctly.
ASSET DIVISION LAWYERS IN ALBERTA
We Use our Financial Knowledge to Fairly Value Your Investments
While many lawyers understand divorce law, not all law firms have specialized knowledge about investing. Our senior lawyer has received education in both stock and real estate investment from Columbia University. Using our legal and financial knowledge, Advantage Family Law will carefully examine the history of your investments and fairly value all assets.
As part of our detailed review of your investments, we start from well before the date of your marriage, all the way to the present. This type of careful analysis allows us to fairly decide “who owns what” after separation and to fairly divide investments between you and your spouse.
Which Investments Are Divisible Under Alberta Family Law
Not All Investment Assets are Divisible
Alberta law does not require all investments to be divided between spouses after a divorce. This applies to both equity (stock) investments such as RRSPs and real estate investments such as rental properties. For example, the value of any investments one spouse had prior to the marital relationship may be his or hers to keep after a divorce. If a spouse purchased stock within an RRSP before the relationship began, the pre-relationship value of the stock can usually be kept by the investing spouse after the divorce. Similarly, if the investing spouse bought real estate in the past, the historical value of the real estate may belong exclusively to the investing spouse. In these scenarios, the non-investing spouse may be entitled to claim a share in any increases in the value of these investments that built up during the marriage. However, a significant portion of the pre-marriage investment value may still rest exclusively with the investing spouse.
Our law firm carries out a detailed, thorough review of the history of all assets and investments from before and after the date of marriage. We review all financial records and trace purchase dates to ensure these investment values are accurate and fairly divided between spouses.
How Inheritance Division in Alberta Works
Protecting the Investment Value of Gifts & Inheritances
Advantage Family Law will carefully identify and value gifts and inheritances received during a marriage. This analysis is important because, while the original asset may be protected, any increase in its value during the marriage may be subject to division between spouses.
Many spouses wrongly assume that a gift or inheritance received by one spouse automatically becomes shared property, but Alberta law generally says otherwise. Where a gift or inheritance is clearly given to one spouse alone, its value at the time it was received will generally remain that spouse’s property. However, the other spouse may be entitled to share in some or all of the increase in value that occurs during the marriage. This increase in value can happen in a few different ways. A cash inheritance might grow through stock market investments, while gifted or inherited real estate can appreciate over many years before a couple separates.
For example, suppose a husband receives a $100,000 inheritance in 2020 and invests the entire amount in Google shares. If the couple separates in 2026, the husband would generally be entitled to retain the original $100,000. However, his wife may be entitled to a share of the increase in value of that investment between 2020 and the date of separation.
TAX SMART DIVORCE STRATEGIES IN ALBERTA
Helping You Avoid Negative Tax Consequences for Investments
Without proper guidance, divorce can sometimes result in negative tax consequences that could otherwise be avoided or minimized. Advantage Family Law has the financial and investment experience to help clients divide investments in a way that eases post-divorce tax burdens.
Often, if a couple sells investment assets during a divorce, this can trigger taxation. Whenever possible, we attempt to settle divorce claims without requiring the sale of investments. For example, we take steps to ensure certain investments, such as RRSPs, are transferred or divided between spouses on a tax-free basis. In resolving divorce claims, our goal is always to preserve as many investments as possible.
Educational Videos & Articles
Divorce and Investments Explained
Browse our library of short videos and articles on investment and portfolio division law in Alberta, including how RRSPs, stock options, and business holdings are divided, straight from an experienced Calgary divorce lawyer.
DIVORCE AND INVESTMENT PORTFOLIO DIVISION IN ALBERTA
Frequently Asked Questions
Are investment accounts with brokerages considered family property in Alberta?
Generally, yes. Brokerage accounts (registered or non-registered) accumulated during the marriage are divisible family property under Alberta’s Family Property Act. Value accumulated before the marriage or received by gift or inheritance may be exempt from distribution.
Can my investment portfolio be divided with my spouse without selling my investments?
Yes, depending on the circumstances, some (or all) of your portfolio could be divided without requiring selling your investments. Depending on the type of investments and the agreement reached between you and your spouse, investments may be transferred, offset against other property, or divided in a way that preserves long-term financial goals.
Is my spouse entitled to a portion of my RRSP in a divorce?
RRSP value accumulated during the marriage by one spouse is generally subject to division between spouses after a marriage ends. Investment value that pre-dates the marriage may be exempt if it can be traced to purchase before your relationship began. When RRSPs are divided, the transfer can often be structured tax-free under a separation agreement or Court order, so the division does not have to trigger an immediate tax bill.
After we divorce, do I have to divide/share any investments I owned before we married?
Not necessarily. The value of any investments (stocks, property) you brought into the marriage can be exempt from division under Alberta’s Family Property Act. However, your spouse may be entitled to share in any growth in the value of this investment that occurred during the marriage.
What happens if my spouse is hiding investments from me?
Both spouses are legally required to provide full financial disclosure as part of any divorce proceeding. If your spouse fails to show what he/she owns, and is intentionally hiding assets, we can ask a judge to order financial penalties against your spouse.
Your Senior Lawyer
Christopher Bungay
What sets Christopher apart is his ability to understand investments from both a financial and legal perspective. In addition to being a lawyer since 2003, he has also received advanced education in financial investing and business analysis from Columbia and Harvard. Christopher applies this knowledge to help clients correctly identify, value and protect assets during the divorce process.