Divorce adds new twist to RRSP planning

Written by Garry Marr | National Post | February 6, 2013

Excerpt:

Darren Gingras is president of the Common Sense Divorce, a new private company hoping to guide Canadians through a marital breakup. “When you are in a retired position you don’t have time to recoup assets as you would do when you are 30 40,” he said. “You are setting yourself up for financial ruin if not done properly.”

Author Gail Vaz-Oxlade, who has been twice divorced and is now separated, said you have to treat a marriage breakdown as business decision. “You can’t let your emotions run away from you,” says Ms. Vaz-Oxlade, who is a minority partner in Mr. Gingras’s company. “You do that and you get steered in the wrong direction.”

Ms. Vaz-Oxlade says decisions like keeping the family home instead of retirement assets have to be realistic. “When people decide they want to keep the home regardless of impact, what inevitably happens is they find themselves living in a big house and nothing for the future. They have to sell the house anyway.”

She adds people need to realize you go into divorce with “a certain amount of oranges” and you have to decide how much you’ll give to the legal system. She notes the average contested divorce costs $23,000.

“As much money as you give away to the system, that’s how much less you will have as your own asset base,” says Ms. Vaz-Oxlade.

“Ultimately, you want to walk away with as much assets as you can because you are about to build a new life.”