Spousal RRSP
I have a spousal RRSP where i am the contributor and my wife is the annuiant. If I file bankruptcy what happens to this RRSP – does she get to keep it or does it go into bankruptcy as well. contributions were made a few years ago. Live in BC
thanks
If your spouse files for bankruptcy, any spousal RRSP’s are considered her property and currently be liquidated and the proceeds made available to the creditors through the bankruptcy proceedings. However, on June 30, 2006 the rules for RRSP’s change drastically and a portion of those investments may be protected. For more information contact a bankruptcy reform for more details.
This is a question that you should direct to someone who specializes in tax. I suggest you contact a CA or perhaps a tax lawyer as they would deal with these types of issues on more regular basis and would be much more familiar with the ramifications of this type of issue.
Generally if you were not insolvent at the time of the contribution to your spouse’s RRSP a few years ago, it is probably not seizable. However, you should provide these details to your trustee who will verify the status of this RRSP.
In most places in the country, as long as the investments are no longer held in your name and they have been made some time ago (i.e. prior to knowledge of any impending event that may cause a bankruptcy) you should have to be concerned. However, as there are significant regional differences in the treatment of personal property you should contact a licensed trustee in your area for confirmation.