Report on bankruptcy among seniors brings to mind importance of divorce, estate planning

On behalf of Gary Kirk of Kirk Montoute LLP posted in High Asset Divorce on Thursday, June 4, 2015.

A recent CBC News article draws attention to the financial struggles seniors in Canada may encounter after retirement. The cited statistics bring to mind the importance of estate planning but also matters related to what has commonly become known as “grey divorce.”

Divorce can have major financial implications at any age, but as we discussed in one of our articles, many seniors end up delaying retirement because of divorce. Ending a marriage later in life can also be particularly complicated in terms of property division, as many older or long-term spouses have accumulated significant matrimonial property.

However, according to a recent report, out of 6,000 insolvency filings in Ontario from 2013 and 2014, debtors aged 50 or older made up 30 per cent of the filers. That percentage represents a 3 per cent increase from the two-year period prior.

Most of the debt that led to bankruptcy among seniors was credit card debt, but payday loans, long known to be risky, were also a significant cause of insolvency.

The average amount of unsecured debt for bankruptcy filers who were 50 or older was more than $68,600, and for filers who were older than 60, the average debt was more than $69,000.

While the report doesn’t make any claims about the connection between grey divorce and debt among seniors, spouses who are considering divorce later in life should make financial and legal plans as soon as possible. A lawyer with experience in family law and estate planning can advise in these matters.

Related Posts: Grey divorce raises complex asset division issues for many, Navigating divorce, taxes and complex asset division, Navigating property division with a shared business, Keeping a business safe in a high asset divorce situation