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The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

The Great-West Life Assurance Company, London Life Insurance Company and The Canada Life Assurance Company have become one company – The Canada Life Assurance Company. Discover the new Canada Life

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Freedom 55 Financial is a division of The Canada Life Assurance Company and the information you requested can be found here.

Are you a member of the Public Service Health Care Plan (PSHCP) and looking for information about your benefits with Canada Life? Get details on the PSHCP Member Services website.

What happens to RRSPs in divorce?

Key takeaways

  • RRSPs are generally considered to be part of the marital property.
  • RRSP assets can be transferred directly from 1 spouse to another.

Are RRSPs considered to be marital assets?

Provincial laws differ when it comes to the division of property in a divorce or separation.

Registered retirement savings plans (RRSPs), including spousal RRSPs, accumulated during the marriage are generally considered to be part of the marital property. Each spouse would be entitled to share equally the value of RRSPs in either spouse’s name.

As with other assets, the value of any RRSPs you accumulated before the marriage is still yours, if you can provide proof. That said, growth in those RRSPs during the marriage is still part of marital property.

How divorce or separation affects spousal RRSPs

Once a couple has separated, spousal RRSP contributions can no longer be made and the spousal designation must be removed from the RRSP account.

Splitting RRSP assets tax-efficiently

If you need to move RRSP assets from one spouse to another as part of your divorce or separation settlement, you can make an RRSP transfer by instructing the RRSP issuer and using form T2220. The transfer shouldn’t result in any immediate tax impact for either spouse regardless of RRSP contribution room, as long as the transferred amount stays in the recipient spouse’s RRSP.

Other important considerations

  • Remember to change your RRSP beneficiary designations unless you still want your former spouse to receive your RRSP assets after you die.
  • Under the Canada Revenue Agency’s Home Buyers’ Plan, you may be able to withdraw up to $35,000 from your RRSP, without immediate tax consequences, to buy or build a new home. Under certain conditions, this can even help you buy out your spouse’s half of a former matrimonial home.  

What's next?

Now that you understand more about what happens to an RRSP in a divorce or separation, why not meet with an advisor or if your workplace benefits are with Canada Life, contact a health and wealth consultant to:

  • Get accurate valuations of your RRSPs.
  • Change your RRSP beneficiary designations.
  • Find out more about the Home Buyer’s Plan.

The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. This information is general in nature and is intended for informational purposes only. For specific situations you should consult the appropriate legal, accounting or tax advisor.

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