Generally Included in the Equalization Calculation
RRSPs, TFSAs, and similar registered savings accounts are generally included as property for the purposes of equalization of net family property, alongside other assets like real estate, investments, and pensions. Their value on the valuation date generally factors into each spouse's net family property calculation the same way other assets do.
Valuation Considerations
For RRSPs specifically, valuation sometimes involves accounting for the fact that withdrawing the funds would generally trigger income tax, meaning the account's "notional" after-tax value can be relevant to a fair equalization, rather than simply using the account's face value. This is a technical area where input from an accountant or financial professional familiar with family law matters tends to add real value.
Transferring Funds Between Spouses
Where equalization results in one spouse owing an amount to the other, funds can sometimes be transferred directly from an RRSP using special tax rules that generally allow this kind of transfer, incident to a relationship breakdown, without immediately triggering tax on the transferred amount — provided it's done correctly and through the right mechanism. This is another area worth confirming with a professional before assuming how it applies to your situation.
TFSAs Work a Little Differently
Because TFSA withdrawals generally aren't taxed the way RRSP withdrawals are, TFSAs generally don't carry the same notional-tax valuation question. That said, TFSA contribution room is personal and generally doesn't transfer between spouses the way funds can be divided — so splitting a TFSA's value doesn't automatically give the receiving spouse equivalent extra contribution room of their own.
Frequently Asked Questions
Are RRSPs counted the same as other property for equalization?
Generally, yes, they're included in the equalization calculation, though their valuation sometimes accounts for the tax that would apply on withdrawal, which is a more technical consideration than for some other assets.
Can RRSP funds be transferred to a spouse without tax consequences?
Generally, yes, through specific tax provisions designed for transfers incident to a relationship breakdown, provided it's done through the correct mechanism — confirm the specifics with a tax or financial professional before proceeding.
Do TFSAs get valued the same way as RRSPs?
Not exactly — TFSAs generally don't carry the same notional-tax consideration since withdrawals aren't taxed, though they're still generally included in the overall property calculation.
Does splitting a TFSA give the other spouse extra contribution room?
Generally, no — TFSA contribution room is personal to each individual and generally doesn't transfer along with the account's value.
Should I involve an accountant in this process?
For anything beyond a very simple situation, yes, generally — registered account transfers involve real tax considerations worth getting right with professional input.