Three tasks to do before you start the pathway
Do these tasks before you fill out the pathway. Take the time you need—there is no rush. A separation agreement is an important legal document and you want to get this right.
2. Fill out your Division of Assets spreadsheet
The Division of Assets spreadsheet is a complete list of all of the assets and debts you are going to divide or keep, along with the value of each asset or the amount owing for each debt. You must have a completed Division of Assets spreadsheet to do the pathway.
spreadsheet Download the Division of Assets spreadsheet here(28 KB) .
The information below will help you to figure out how to divide your assets and fill out the spreadsheet. It does not give you legal, tax or financial advice. See a professional for advice about your specific situation.
You should each fill out a Statement of Property before you do the Division of Assets spreadsheet.
Then fill out your Division of Assets Spreadsheet before you start the pathway.
Introduction to filling out the spreadsheet
Replace the Person A & Person B headings with your names.
List family assets and debts
First, list all the assets and debts you are going to share with each other. This is your inventory.
Make sure you agree about what assets and debts will be shared, and about who is going to keep each item or be responsible for a debt. If there is a joint debt remember you must talk to the lender to see if the debt can be transferred into one person’s name.
Determine values
Next, decide what the value is for each item in your inventory.
The value that you give to an asset or debt is usually based on what it was worth or how much money was owed on a particular day. The date you use to value an asset or debt is called the valuation date.
Often the valuation date is either:
- the day you separated (separation date), or
- the actual day you are dividing the asset or debt (date of division).
There can be different valuation dates for different types of assets:
Assets that go up in value over time (appreciate)
For these types of assets, people generally use the value of the asset on the date of division. Common examples are real estate (family home), RRSPs and other investment accounts.
Assets that go down in value over time (depreciate)
For these types of assets, use the value of the asset as of your separation date. Motor and other vehicles are common examples.
Debts
As with assets, different debts can have different dates for determining how much is owing. For example, for a mortgage use the amount owing on the day you divide the value of the home. For a credit card debt, you would generally use the amount owing on the date of separation.
Be careful!
There are always exceptions to this general approach—it is not set in stone. Choosing a fair valuation date can be complicated for some assets. If you cannot agree on valuation dates for each asset and debt, get more legal information or talk with a lawyer or financial advisor for help.
Tips for filling out the spreadsheet
Important! Enter values in the DA spreadsheet under the name of the person who will keep the asset or be responsible for the debt. Do not divide or share the values within the spreadsheet (above the total). The total at the bottom will automatically update to share one half of the value of each item between the parties.
For example, Sue and Tom own a vehicle together. Sue and Tom have agreed that the vehicle is worth $12,000. There is no loan on the vehicle. Only one person can keep the vehicle. Sue is keeping the vehicle, so they put the entire full value of the vehicle in Sue’s column. The total at the bottom of the spreadsheet will then automatically update to share one half of the value of the vehicle with Tom ($6,000).
| Value | Tom | Sue | |
| 1) vehicle | $12,000 | $12,000 |
Family Home
A professional appraisal is the best way to get a value for the family home. If you don’t have an appraisal, you can decide together what the value of the home is worth.
If you have both agreed to sell the family home, leave the family home part of the spreadsheet blank. You and your spouse will have to decide what debts will be paid from the proceeds after it is sold and how the profit will be shared.
If one spouse is going to keep the house then the usual approach is to find the net equity or value of the house as if it was sold, as follows:
In the DA spreadsheet, enter the value of the home.
The net proceeds (net equity) of the home is the profit that would be left after deducting expenses from the proceeds of the sale of the home. Fill in the following amounts in your spreadsheet—they will automatically be subtracted from the value of your home to give you the net proceeds:
- any amount owing on the mortgage
- other property-related debts. Examples are:
- any liens (debts) registered against the property
- any penalties imposed by the bank if you are paying out the mortgage early or if there were missed mortgage payments,
- a debt to repay money withdrawn from an RRSP by first time home buyers
- real estate commission of 5% (home value times 0.5). You don’t have to calculate this – it is calculated automatically
- $1200 for the estimated cost of legal fees.
Once you have the Net Proceeds of Real Estate value, fill in that amount under the person who is going to keep the Family Home. The total at the bottom of the spreadsheet will then automatically update to share one half of that amount with the other person.
Cars, trucks, recreational vehicles
Enter the net value of each vehicle as of your separation date. Net value includes any debt owed against the vehicle.
For example:
($11,000 car value on separation date) - ($5,000 car loan) = $6,000 net value to enter in the spreadsheet.
Furniture and other household items
If one party is keeping more of the furniture and other household items enter what amount of money that party will pay to the other party as compensation for those items. This should be a small amount of money, based on yard sale or lower resale value, not replacement value.
RRSPs and other investments
Registered investments
You have two options for dealing with registered investments:
1. Divide registered investments equally by way of spousal rollover. This means the bank will make the value of the RRSP that is being divided equal between the two parties. You must do that by meeting with your investment advisor who will then make sure that each party has the same amount in their registered investments. If you choose to rollover RRSPs to equalize the values, do not include the values of the RRSPs in your spreadsheet.
2. You each keep your own registered investments. In this case take the value of the RRSP on the day that it is being divided and subtract 30% to account for the income tax that will have to be paid when the RRSP is cashed in. Subtracting income tax gives you the true net value of the RRSP.
Determine the value of your investments based on the following:
(Total value of the investments you owned when you separated) + (any interest accumulated) - (amounts contributed to the portfolios since separation)
Enter this value in your spreadsheet.
Remember, do not enter a value for both parties on the same line.
Non-registered investments
These include cash, savings and chequing accounts, TFSAs, stocks, bonds, mutual funds, and non-registered GICs.
If you are dividing the value of your non-registered investments equally, enter the value of each investment. Usually, people will value the investment as of the date you are dividing it.
If you are each keeping your own registered investments, use one line for each person’s investments, like this:
| Investments | Value | Tom | Sue |
| 1) Scotiabank TFSA | $6,000 | $6,000 | |
| 2) RBC mutual fund | $4,000 | $4,000 |
Remember, do not enter a value for both parties on the same line. If you do the formula at the bottom of the spreadsheet will not work properly and you will end up with an error for your equalization payment amount.
Debts
Debts
Enter the debts that you want to divide. Do not put in debts that you have already included – such as under mortgage, or when determining the net value of a vehicle.
Final Payment
The final payment is the amount that is owed by one party to the other at the bottom of your Division of Assets spreadsheet. It is also called an Equalization Payment.
The person who owes the amount must come up with the money to make the final payment within 90 days of the signing of the separation agreement. That is mandatory. DO NOT use the separation agreement pathway if final payment can't be made within that time.
3. Gather other information you need
You will need basic information about your relationship:
- Full names of both parties
- Date you began living together as spouses
- Date you were married if this applies
- Separation date
You may also need the following information:
Dividing property and debts
Here are some things to think about before you fill out the property division part of the pathway:
- If you own a family home, what will happen with it? Will one person keep it and continue to live there? Or sell it?
- If one person is going to keep the home, how are they going to pay the other spouse their interest?
- If there is a mortgage or other liens on the home they will have to be paid first. You can’t change the ownership of a home with a mortgage or a lien unless the bank approves this first.
- What is the value of vehicles, boats or a trailer and are there any loans or liens that will have to be paid out?
- How will financial assets like bank accounts (joint and individual), RRSPs, and non-registered investments be valued and divided? What are the tax considerations when valuing and dividing these assets?
- Who will pay family debts like loans, lines of credit, credit cards, etc?
Your children and child support
Gather the following information and do the following things before you start:
- Full names and birthdates of children
- Child support information, including who pays support, how much, and any extra expenses you may want or need to pay for the children, such as childcare (special expenses). Where appropriate, fill out a statement of income, with attachments to confirm what is in the statement
- Know the details about your parenting arrangements—including decision-making responsibility and parenting time. Review Justice Canada’s parenting plan tool. You can use that tool to do a detailed parenting plan. Or, you can make a basic parenting plan using the pathway.
- Read the page about Parenting after separation
Spousal support
Will one spouse pay support? If yes, how much and for how long? How will it be paid?
Note that if spousal support is going to be paid, your agreement will say that it can be reviewed if big things change for either party in the future.
If you are making spousal support payments to your spouse under a written agreement, you may be able to claim them on your income tax return. You should talk with a lawyer, an accountant or Canada Revenue Agency about spousal support payments and income tax.
Workplace pensions and Canada Pension Plan
Workplace pensions
If either party has a pension from their work you must contact the pension plan's administrator to find out:
- the type of pension plan
- the legal rights of separating spouses under that plan, and entitlements in your case
- what time period will be used for division purposes, if you both agree to share the pension
- how much can be shared (what percentage) and what that means for each of you after the pension has been shared
- the value of the pension benefits
- the steps to take and forms you need for pension sharing, if you both agree to share the pension
- if the plan you and your spouse have for the pension is possible and enforceable for that pension
If you plan to share the pension, you will need information about the relevant time period for pension division, and what percentage will be shared, before you can complete that part of the pathway.
There are different pension plan administrators for different types of workplaces. Here are starting points for finding the right plan administrator for your plan:
- Canadian Armed Forces pensions
- Federal Public Service Pension Plan
- Nova Scotia Pension Regulation Division
- Nova Scotia Public Service Supperanuation Plan and Nova Scotia Teachers' Pension Plan
Pension law is complicated, so we strongly recommend that you also speak with a lawyer who knows about pension law to help you decide what to do with a work pension.
You must see a lawyer if:
- one or both of you is retired and getting their retirement pension, as this pathway assumes that you are dividing the pension before retirement
- you want to trade your share of the value of a pension for other assets. This pathway does not allow for that.
Canada Pension Plan
A separation agreement can be helpful for establishing a date of separation for Canada Pension Plan credit splitting. The pathway's separation agreement has a standard paragraph that says either party may apply to divide the Canada Pension Plan (CPP) credits that either party built up during their relationship. Eligibility and application information are on the Canada Pension Plan website.
Life and medical insurance
Who will pay for insurance policies and who will be the beneficiaries? What coverage is there and for who? If you name a minor child as beneficiary you will also need to name a trustee, who is a person who is 19 or older to receive the insurance money and to manage it until the child reaches the age of majority.
Fill out this pathway now
The Separation Agreement Pathway will be launching soon and available by end of April.
