Partition of property
Partition consists in paying the "debt".
Payment of the "debt"
A former spouse pays his or her debt in cash or by transferring property that belongs to him or her. The former spouse can transfer property in its entirety, even if part of the property did not accumulate during the marriage. He or she can hand over any property, even property that is not part of the mass for partition, for example, a property that is not part of the family patrimony.
The method of paying the debt must agreed upon by the former spouses, or determined by the judge, taking into consideration the preferences and needs of each spouse.
Even if certain property that is part of the mass for partition are not touched, this does not necessarily mean that a spouse renounces his or her rights. It may mean that the debt was paid with another property.
In the case of a pension plan
Partition of a pension plan consists, for the member, in paying his or her debt by transferring to his or her former spouse a part of the benefits accumulated in the plan.
Applicable rules of partition
The Civil Code of Québec provides that, for the purposes of family patrimony, no one may contravene the rules of partition provided for in specific laws, such as the Supplemental Pension Plans Act.
Limit of 50% of the benefits
The Civil Code of Québec provides that the debt related to partition of the family patrimony cannot be paid by transferring more than half of the benefits in pension plans subject to or established by an act such as the Supplemental Pension Plans Act, to which he or she is a member of.
This rule applies only in the following cases:
- to partition of the family patrimony (and not, for example for the partition of acquests)
- to plans subject to or established by an act (which includes the voluntary retirement savings plans [VRSPs] and excludes locked-in retirement accounts [LIRAs], life income funds [LIFs] and registered retirement savings plans [RRSPs]).
The 50% limit (50% of the total, not 50% of what was accrued during the marriage) is calculated according to the value of the benefits at the time of valuation, before interest.
It applies to all of the plans subject to or established by an Act. For example, if a former spouse has benefits in 2 pension plans, the first with a value of $30 000 and the second with a value of $25 000 he or she can transfer the total value of the benefits in the second plan.
For de facto spouses, the Supplemental Pension Plans Act provides for a similar limit. However, it applies to each plan subject to that Act.
Given the information above, the plan administrator cannot always know with certainty that a judgment granting more than half of the total value of the benefits in a plan exceeds the limit.