Question

Makesha and Damien were married for 9 years. They have now separated. On valuation day, Makesha owned the following assets:-a house owned jointly with Damien worth $600,000, which has a mortgage held jointly of $200,000 investments in her name only worth $80,000 and RRSP in her name only worth $40,000 and the silver antique tea pot she bought before she was married is now worth $20,000. At the date of marriage she had saving of $15,000 and student debt of $11,000.She also bought a silver antique tea pot before she was married, which on date of marriage was worth $10,000. On valuation date, Damien owned the following assets; a house owned jointly with Makesha worth $600,000, which has a mortgage held jointly of $200,000, a stock portfolio in his name only worth $190,000, RRSP in his name only worth $80,000 and an antique painting he had inherited from his aunt during the marriage worth $45,000. At the date of marriage he had savings of $10,000 and a debt of $4,000.

Calculate the following, please show steps.

a. Each person's net worth as at valuation date.

b. Each person's net family property.

c. Calculate the equalisation payment.

d. Calculate each person's net worth after the equalisation payment.

Answer 1

a) Determination of each persons net worth as ar valuation date

makeshas net worth =

share in the house (600000-200000)*0.5=$200000

antique tea pot =$20000

savings =(15000-11000(being student debt)) =$4000

investment =$80000

RRSP =$40000

=$344000

damien s net worth

Share in the house =$200000

stock port folio =$190000

atique painting = $45000

savings (10000-4000) =$6000

RRSP =$80000

=$521000

c) equalization payment

damien and makesha needs to pay the loan on house property jointly and euaquAlly

in this case two of them needs to pay $100000 each

in case of domain only 80000 in his RRPS account so he needs to pay 20000

incase of makesha she needs to pay 60000 than 40000 in RRPS

d) net worth after eaqualisation

domein (521000+100000-80000-20000)=521000

mokesha(344000+100000-40000-60000)=344000