Disclosing the Value of Assets
The obligation to disclose the value of assets, belongs squarely with the person who owns the assets. In the event your spouse owns a corporation or business, they have the financial burden to have that business valued. There may, however, be disputes over the type of valuation to be completed. This is an important decision that should be made based on financial advice. The manner in which a business valuator calculates the value of a private business can have significant consequences of the valuation. The valuation will have a tremendous impact on the property settlement.
Typically, privately owned corporations, are the vehicles families used to move income from a business into support the family household. It is imperative that your rights and entitlements are protected with a proper business valuation.
Pensions
There are two types of pension plans, (1) a Defined Benefit Plan and (2) a Defined Contribution Plan.
A defined benefit pension typically has a set of permeators that dictate what a member will receive when they retire. These types of plans are not typically concerned with the actual contributions the member may have made to the plan, but rather their duration with the organization, and their average salary over a given period.
A defined contribution pension typically does not define the amount a member of the pension will receive after they retire. Rather, a member will receive a monthly pension payment post-retirement, based on the contributions they made to the pension together with the interest earned on those contributions. Typically, the member may also receive payments into their pension account from the employer. Those monies will also increase in value over time based on the growth rate of the pension.
Depending on the Province, pensions are valued differently. In Ontario, most provincially regulated pensions are administered and valued through Financial Services Regulatory Authority of Ontario (“FSRAO”). FSRAO had made the valuation process standardised, and simple. Litigants in a family law proceeding complete forms with the FSRAO and a pension valuation is typically completed within 90 days, for use in determining appropriate property settlements.
In Alberta, there is no central government agency that can perform pension valuations in same fashion as Ontario. As a result, in some cases it may be necessary to have an actuarial valuation completed to value a pension plan for the purposes of determining a fair and equitable property settlement.
The type of disclosure that will be necessary is dependent upon the province you reside, and the type of pension interest you may hold.