Separating – are your plans adequate enough?

Separating – are your plans adequate enough?

LEGALLY SPEAKING: Here is the next article in a series of legal columns by Quebec law firm  Joli-Cœur Lacasse Avocats.

IN THE CASE OF SEPARATION, ARE THE RETIREMENT PLANS ACCUMULATED OUTSIDE THE PROVINCE OF QUEBEC SUBJECT TO PARTITION BETWEEN SPOUSES?

In the Province of Quebec, in the case of a divorce or separation from bed and board, there will be partition of the family patrimony, unless the parties waive their rights to that effect but only as strictly permitted by the law. In this regard, section 415 of the Civil code of Québec sets out, among other items, different retirement plans that are included in the family patrimony and they are subject to partition between spouses in the case of their separation.

The Quebec legislator also provides for the inclusion of retirement plans in the family patrimony that may be governed by similar acts to those of Quebec but issued by other jurisdictions. Thus, if one spouse has contributed to a retirement plan in another province or another country, those contributions in the retirement plan(s) will still be subject to partition for the benefits that accrued during the marriage.

In the Province of Quebec, to determine the parties’ rights for the purpose of sharing this item of the family patrimony, the accumulated benefits under the pension plan accrued during the marriage, including the interests for the same period, will be evaluated. Generally, various pension plans, such as those administered by the CARRA (Commission administrative de régimes de retraite et d’assurances), have their own calculation methods, but it may become necessary to hire an actuary to determine the benefits that are to be shared between parties. Thus, for the pension plans accumulated abroad, the rules of valuation and devolution, if any, set out in the constituent Act of the regime and its regulations will have to be referred in order to establish the valuation and the partition of the accrued benefits of the spouses for the purpose of the divorce.

Once the valuation of the accumulated benefits under the pension plan is completed, the benefits accrued during the marriage shall be shared equally between the spouses. When the plan comes from abroad, it has to be noted that it will be necessary to verify the fiscal impact that may arise from any rollover or transfer to the other spouse. Thus, it may be more profitable to estimate the value of the pension plan and to compensate the other spouse by giving in payment (example by transferring ownership of a property) or by payment of a global amount of equal value. When the legislation applicable to the pension plan does not provide any rules regarding the partition, it is possible to build on the rules governing family patrimony and matrimonial regimes in the Province of Quebec and to proceed with equal sharing.

In case of difficulty in determining the value of the pension plan accumulated abroad or on the transfer of the benefits to the other spouse, your lawyer will advise you properly for example by proposing to work together with an actuary to determine the value of the plan as well as the amount due to the other spouse for the purpose of the partition of that item of the family patrimony.

Because your financial security depends on it and many parameters are to be considered, you should not hesitate to seek guidance regarding such important matters.

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Jolicoeur Lacasse Avocats

Notre cabinet qui regroupe une centaine d'avocats présents à Québec, Trois-Rivières et Montréal, est reconnu pour offrir, à des coûts avantageux, des services juridiques efficaces et efficients. Nos professionnels sont compétents, imaginatifs et désireux de vous permettre d’atteindre vos objectifs dans un environnement de partenariat et de convivialité. Ils sont en mesure d’identifier et d’anticiper vos besoins et, le moment venu, ils sauront agir de manière proactive et entamer des démarches novatrices et sécurisantes, afin de vous offrir un service adapté à votre réalité.

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