We have all received one of a couple phone calls, where your jaw drops and your heart sinks. The phone rings and it sounds something like this…

“Hi! how are you?” 

“I’m doing well, you?” 

“Well, I just wanted to let you know that we are getting a divorce.” 

The words spring out of the phone loud and clear. The reaction to this news is generally silence followed by shock and then the realization that all is not lost.  But how do you explain this to the person on the other end of the phone. You don’t you listen and console them in whatever way you can.

There will always be that one person who has to say it out loud.

“I knew they were not the one for you!” 

Of course, that person was the first one at the bar on the wedding day celebrating with a drink in one hand and giving high fives to others gathered around on how this is the best wedding ever! Yes, but they knew…

With the Covid-19 pandemic surpassing it’s one-year anniversary we unfortunately have heard this conversation a lot more than we care to explain. It has been a mentally tough year for everyone and if there were cracks in the amour before this pandemic it has only made them more obvious. It is never easy to say goodbye to a loved one but in some cases the love has gone and the ensuing fight to the death has begun. If children are involved always be considerate of the children, they must remain the sole focus of this process. If not for you then make sure you do the right thing for the children, they are not to be used to better one’s position in this fight or exposed to the problems within as they never asked to be part of the problem. They are the future of our society and deserve your best when it comes to their well-being.

Let’s be honest most of the time divorce is for the best of all involved. There is value in moving on with one’s life both mentally and physically. In some cases, couples get divorced and remain friends and in other cases not so much. Hindsight will always be 20/20, but just because it did not work out this time does not mean it never will. As we move forward we would be hard pressed to say that society will never face another year like 2020, since the world had already experienced a similar circumstance in 1917. As our world is rapidly changing one never knows what is in store for us in the future or what our timeline is for another world stopping event. 2020, was taxing on all of us and our relationships have been pushed to their limits, for those that have survived with your relationship in tact congratulations and carry on. To those that have not survived consider it a reset, a time to move forward and seek what it is you are looking for in the solace of happiness.

So, what happens next?

Unfortunately, there is never a plan in place for this unforeseen circumstance, but because it has been documented many time before the steps needed to resolve this situation are well known. As always, we ask that you seek expert advice or consul when dealing with divorce. The following is the process which will help you finalize these proceedings so you can find that new beginning. We are not experts in this space as we leave that to the lawyers just remember there has been a plan set in place regarding your future. With that in mind we have put most of the tough questions behind you because we have looked at your future financial plan in detail.

Assets and Debts

A couple who intends to divorce must add up all their assets and subtract all their debts in order to arrive at a list of all assets and debts. The assets, known as “family property,” include everything the couple owned separately or together as of the separation date, regardless of who the property belongs to. This is important, since regardless of whose name is on the property deed, when a couple divorces all family property is split equally between the spouses unless an agreement or the courts say otherwise.

What is considered family property?

The house

Other land, houses, or condos

Bank accounts

Insurance policies

Investments

RRSPs

Pensions

Business interests

Contact the professionals you’ll need to consult

While many people will seek out a lawyer to initiate their separation and to finalize their divorce, other professionals may be required in the process, and in many cases, you will have these professionals already on your team and it’s best to involve them sooner, rather than later: 

A Real Estate Agent

Accountant (or tax specialist)

Financial Advisor

Assess the value of all property

Now that you’ve got your list of assets and debts, and your professionals in place, it’s time to figure out what everything is worth and what is owed. This is often the hardest part.

Finally, you need to list all common debt as well as personal debt. Debt brought into the marriage does not become the responsibility of the other person. However, debt assumed during the marriage is split equally, just like all marital property. Debt is an area that generally catches one of the spouses by surprise all of the time. Regardless of knowing or not you are now both responsible to reconcile the debt accumulated while together.

What happens to real estate during a divorce?

Divorce is a time of emotional and financial turmoil, which is hard enough—but then you also have to tackle tough questions about who owns what. Each spouse is entitled to half of the equity that’s accumulated during the marriage in the property that was used as the family home. If both spouses have agreed to sell the marital home and split the proceeds, then, typically, both are responsible for any costs and expenses associated with this process. Each will pay for half the renovations or upgrades required to put the home on the market; each will pay half the Realtor’s commissions and any other costs. The good news is that many of these costs can be deducted from the final sale price of the home, meaning that relatively few expenses will be out-of-pocket costs prior to the sale of the home. 

Negotiate

Now that you’ve got the numbers worked out, it’s time to find the middle ground. Whether working with a mediator or a lawyer, or just sitting and talking with your soon-to-be ex, you should expect a process of negotiation. Keep in mind, as well, that while the vast majority of divorces result in an equal division of assets and debts, there are circumstances when the court will be called upon to divide family property and family debt unequally.

If you can remember a couple of things while proceeding through this process it might help to complete the task at hand in a timely and efficient manner. At one point this was the person who you loved and planned on being with for the rest of your life. Your future is not set in stone you have the ability to create the life you want to lead and only you can stand in your own way of success.

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