Case #2: Mira and Ahmed

Mira requires your service in determining what are her financial obligations to her former husband Ahmed. They began living together five years ago in January, and they married in July of the following year. Mira was the sole bread winner before their break-up and Ahmed stayed at home to take care of their child and worked part-time. She requires guidance as to what are her obligations for property division, division of pension credits, and her life insurance policy.

Property Division

They lived in a province that calculates an equalization payment for the division of matrimonial property. When they married, Mira had an investment portfolio worth $70,000 and personal assets of $20,000. Ahmed had a car worth $24,000, a car loan of $6,000, plus other personal assets of $30,000. When they divorced, Mira's portfolio was worth $120,000 and she had personal assets of $50,000. Ahmed had paid off his car loan, the car was worth $6,000, and he had other personal assets of $60,000.

Division of Pension Credits

Assume that Mira and Ahmed separated last year and their CPP credits before are as follows:

year	unadjusted pension credits before division ($)
	Mira	Ahmed
6 years ago	21,000	18,400
5 years ago	22,000	18,800
4 years ago	25,000	9,000
3 years ago	25,600	9,200
2 years ago	26,000	18,000
last year	26,400	18,500
this year	27,000	18,900

Life Insurance

During their marriage, Mira bought a whole life insurance policy on her life with a face value of $100,000. She named her mother as the beneficiary and insurance policy has a cash surrender value of $24,000.

Questions (2 marks for each answer):

What is the retirement equalization payment?

What is the total amount of the pension credits that will be added to Ahmeds pension?

If Ahmed applies for a division of community property, what amount will he receive from the Insurance Policy?

What are your thoughts on Domestic Contracts, especially providing guidance to future clients?