According to Statistics Canada, “grey divorce” (divorce among older adults) has been rising steadily for several years. With an aging population, it is likely to continue to do so.
Grey divorces are fraught with issues not prevalent when younger couples separate. In fact, divorces can be financially devastating for older adults, who have little or no time to rebuild assets or adjust their retirement planning. Since couples must split their assets and no longer share living costs, some divorcees may have to postpone or re-emerge from retirement. Many will also have to reduce their standard of living to reflect a smaller pool of retirement funds for the future.
The financial considerations for grey divorces can be complex. Couples must divide their assets, which includes matrimonial homes, RRSPs, pensions, investments, etc. This can be especially tricky when spouses are close to retirement, as it may be best for someone to retire first and then calculate future support payments. Conversely, it may be better for other individuals to settle the division of assets and support payments before they retire, as then they have the option to push back their retirement date to put themselves in a better financial position (albeit, while shortening their retirement).
Data from Statistics Canada also shows that women bear the brunt of the financial burden of grey divorce. This rings especially true in the Boomer generation, which is made up of more traditional couples where the wife has never worked and may have little to no knowledge of the couple’s financial position. These women are especially vulnerable, as they can no longer retrain for work and have no pension of their own. Getting sound financial and legal advice is imperative in these cases.
Ultimately, those going through a grey divorce, or a “silver separation”, should seek out legal advice tailored to their needs, to ensure that they have a sound plan for the future, including retirement and estate planning. Contact our Family Law Group today for more information.