But He Said He Would Never Touch My Pension!


I had represented this young teacher for about 5 months. From the outset, she told me that she wanted to be fair. She wasn’t going to let her spouse walk all over her; but she understood that in order to get on with her life, she would have to make compromises.

The husband’s lawyer told me that he had similar instructions; his client wasn’t going to “nickel and dime”.

The case progressed through the usual steps. They both made financial disclosure. They talked about arrangements for the children. They even took care of some of the “housekeeping issues” early: they closed the joint accounts, opened separate credit card accounts and attended the motor vehicle office to transfer ownership of the cars.

All in all, it was pretty smooth.

The wife had paid into her pension for about 12 years. We obtained the usual report and concluded that she had saved approximately $175,000 over the course of the marriage in her pension plan.

Of course, her pension was not their only asset. They had a house. They had some savings. Her husband’s employer had a much more modest pension and during the marriage, money was saved and placed into his RRSP as part of the usual family-planning.

I completed the marital accounting. The “bottom line” was that she owed her husband a property payment of $50,000. Since the house was being sold and would give them each significant money, I thought it made sense that she pay her husband the $50,000 from her sale proceeds. Yes, she would have less money for her down payment for her new house, but at least her retirement plans would be uninterrupted.

Once I had a pretty good handle on what the settlement looked like, I invited her to my office. Naturally, she wanted to know why she had to pay her husband the $50,000. I explained, basically, that while they both accumulated assets during the marriage, she accumulated more, primarily because of her pension.

The wife looked at me with surprise, to say the least. “He told me that he would not touch my pension.” While she knew that the law required her to account for her pension, she thought that her husband would cut her some slack. In short, she felt betrayed. She felt that her husband had lied to her.

I have heard this before. “I will not touch the pension”. But then, it appears in the calculations.

In fact, I think that both the husband and wife were correct. They were just thinking about two different things.

If you take a look at the above scenario, the husband did not “touch” her pension. She kept her pension, without any division. In turn, he was compensated by receiving more than half of the matrimonial home proceeds. The husband feels that he lived up to his promise.

From the wife’s perspective, however, she thought that her husband was saying, in effect, “I will pretend that your pension doesn’t exist.” Aha, that’s different. If the husband was prepared to take that position, they would’ve each received one-half of their proceeds. He may have even owed her a small amount from his share.

Why am I giving you this example? Because I think it illustrates a couple of lessons about family law settlements:

1. Husband and Wives Should Be Encouraged To Have Discussions After Separation

It is a good thing that parties talk after the separation, if those discussions are positive in nature, with an important exception: if the discussions simply lead to arguments, then the discussion should end. But if parties are prepared to resolve certain aspects of their lives privately, that’s a good thing. But even positive discussions are not binding; they are only a starting point.

By the same token, sometimes these discussions, however well-intentioned, lead to unrealistic expectations. Since 1986, successive governments have promised to make family law “easier” or “fair.” Far from the truth. The laws have become longer, harder to read and more technical than ever.

2. Agreements Need to be in Writing

No matter what a spouse says, these verbal agreements are not binding. The legislation is clear: at a minimum, an agreement must be in writing, signed and witnessed. And those are just the minimum requirements. Because of the complexities, sometimes the same words mean different things to different people.

What is the lesson? If you are comfortable, have sensible discussions with your spouse. You may even want to discuss with me ahead of time what areas can be explored. Nothing wrong with that. But no agreement reached during these discussions is “in stone”. In some cases, they do present an opportunity for the spouses to tell their lawyers, “We have been doing some talking and we would like to take our file in this direction.” In doing this, the parties can relieve stress and come out of this process with a more positive experience.

To speak with an experienced Windsor lawyer about property division after a divorce or separation, call the office of Jason Howie at 519.973.1500 or contact us online. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.

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