As you go through a divorce in British Columbia and divide your assets, it’s typically not that hard to see the current value of some assets. For instance, if you have a main home and a summer cottage that are worth roughly the same amount, you may feel fine with saying that your spouse gets the house if you can have the cottage. It’s an even and fair split.
However, it’s also very important to look at what your assets are going to be worth down the road. The change in value could make you feel like the split wasn’t so fair in the future.
For instance, you may agree to let your spouse have a home that is worth $400,000 if you can keep the $425,000 in your joint bank account. You’ll feel like you got a good deal because you came out with more monetary value. However, if the property values in the area rise over the next ten years so that your home is now worth $600,000, you’ll see that your spouse actually made out far better than you.
The same basic principle can be applied to pension plans and retirement funds. Those who aren’t close to retirement age are sometimes willing to give up their claim on these funds to get other things that they want, but you could regret this when you go to retire and have nothing, while your spouse has a lot from an account that has grown over the years.
When dividing assets, think about both the value today and the future value of those assets.
Source: Practical Money Skills Canada, “Splitting Assets and Debts,” accessed May 22, 2015