Grey Divorce

Grey Divorces and the Financial Challenges for Older Couples

Divorce is becoming increasingly prevalent among Canadian seniors, and with the rise of such ‘grey divorces’ come unique financial considerations. 

While younger couples going through a divorce may have concerns about issues such as child support, older couples are more likely to be concerned about how a divorce will affect their retirement income and plans and the division of marital property. According to the Toronto Sun, 80% of older couples who divorce end up delaying their retirement. However, with proper financial and legal planning, retirement funds can be protected from the unforeseen consequences of a grey divorce.

Retirement Funds Threatened

In many cases, according to The Globe and Mail, one of the parties to a grey divorce has spent most of their marriage taking care of the home and family while the other spouse has handled the finances. When a marriage ends late in life, older adults often find themselves without the skills set to find a new job and without enough time to build up their own savings.

Additionally, even people who have worked and saved for retirement may find that they have to postpone their retirement plans due to a costly divorce, as they failed to adequately prepare for the legal challenges that divorce poses. The other spouse, for example, may be entitled to a significant share of the spouse’s retirement funds.

Wider Legal and Financial Implications of Grey Divorce

Grey divorce can have far-reaching legal and financial consequences beyond retirement savings. Dividing long-held assets, such as real estate, investments, or a family business, can become complex and may require careful valuation and negotiation to ensure a fair outcome. Spousal support obligations can also extend over many years, affecting the financial security of both parties. 

Any separating couple, young or old, should visit or revisit estate planning, wills, and beneficiary designations to reflect their new circumstances and ensure their wishes are properly executed. Updating powers of attorney, healthcare directives, and joint accounts is equally important to prevent disputes or unintended outcomes. 

Preparing for Grey Divorce

Spouses who are considering going through a divorce later in life should plan for any financial and legal repercussions as soon as possible. For example, Canada Pension Plan credits are usually eligible to be split between both spouses, thereby helping each spouse better plan for retirement.

Experts recommend working with a financial advisor to determine the best course of action when dealing with the financial side of divorce. This advice is especially important for spouses who have primarily relied on the other spouse to take care of money matters during the relationship. In addition, people divorcing later in life are far more likely to be on fixed incomes and thus must rely much more heavily on a favourable divorce settlement to ensure a secure retirement.

The Need for Legal Advice

Just as important as financial advice, however, is qualified legal advice. In fact, wise financial decisions related to divorce often overlap with the legal side of divorce matters. A qualified family lawyer can advise clients about what their rights are when it comes to dividing marital property during a grey divorce.

Doing a divorce the right way is particularly important for older adults, as the financial stakes are often so high. For this reason, divorcing spouses should contact a highly experienced divorce lawyer to discuss what legal and financial options are available to more easily enjoy their golden years.

How Kirk Montoute Dawson LLP Can Help You Navigate Your Grey Divorce

Divorcing later in life presents unique challenges, including protecting retirement savings and navigating the division of long-held assets. At Kirk Montoute Dawson LLP, our experienced family lawyers help older couples understand their rights, plan strategically, and address the legal complexities of grey divorce. Contact us today to discuss your case and get the legal guidance you need.

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