Educational Resources

Post-Divorce Financial Planning in Ontario: Restructuring, Tax Implications, and Future Protection

Written by Russell Alexander / (905) 655-6335

Divorce not only affects personal relationships but also brings significant financial changes. In Ontario, as of 2024, individuals who have gone through a divorce must consider how to restructure their finances, understand the tax implications of their new status, and take steps to protect their financial future. This article will guide you through the essential aspects of financial planning post-divorce, offering strategies to secure your economic well-being.

Restructuring Finances After Divorce

  1. Assessing Assets and Liabilities: Start by taking a comprehensive inventory of your assets and liabilities. This includes bank accounts, investments, property, debts, and any joint accounts or liabilities that need to be separated.
  2. Budgeting for One: Your income and expenses will likely change significantly post-divorce. Create a new budget that reflects your current income, living expenses, child or spousal support payments, and any other financial obligations.
  3. Closing and Opening Accounts: Close any joint bank accounts and credit cards, and open new ones in your name. Ensure that all automatic payments and direct deposits are updated to reflect your new accounts.

Understanding Tax Implications

  1. Filing Status: Your tax filing status will change after divorce. Understand how filing as a single individual will affect your tax obligations and potential benefits.
  2. Child and Spousal Support: In Ontario, child support payments are not taxable income for the recipient or tax-deductible for the payer. However, spousal support payments are taxable for the recipient and tax-deductible for the payer under certain conditions.
  3. Division of Assets: Be aware of the tax implications of dividing assets, especially when it comes to the matrimonial home and retirement accounts. Certain transfers can trigger tax liabilities.

Protecting Your Financial Future

  1. Updating Estate Plans: Post-divorce, update your will, powers of attorney, and any beneficiary designations on life insurance policies, retirement accounts, and other financial instruments.
  2. Insurance Considerations: Review your health, life, and disability insurance coverage. You may need to adjust policies or purchase new coverage to protect yourself and your dependents.
  3. Retirement Planning: Assess the impact of divorce on your retirement plans. You may need to adjust your savings strategies or consider alternative retirement scenarios.
  4. Building Credit: If most accounts were in your spouse’s name, you might need to build or rebuild your credit. Start with a credit card in your name, use it responsibly, and pay the balance in full each month.

Final Thoughts and Recommendations

Seek Professional Advice: Consider working with a financial planner, tax advisor, or divorce financial analyst who can provide tailored advice for your situation.

Stay Informed: Keep abreast of any changes in laws or regulations that could affect your financial situation. Knowledge is a key component of empowerment.

Margie Primero-Pimentel, Junior Managing Associate Lawyer & Mediator

Focus on Long-Term Goals. While it’s important to address immediate financial needs, don’t lose sight of your long-term financial goals. Continue to save and invest with the future in mind.


Navigating your finances after a divorce in Ontario requires careful planning, a clear understanding of the legal and tax implications, and a proactive approach to protecting your financial future. By taking the time to assess your situation, seek professional advice, and make informed decisions, you can establish a solid financial foundation for the next chapter of your life. Remember, while divorce represents the end of one part of your life, it also offers the opportunity to start anew with a focus on achieving your personal and financial goals.

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About the author

Russell Alexander

Russell Alexander is the Founder & Senior Partner of Russell Alexander Collaborative Family Lawyers.