We plan for many things in life. We plan for graduation, our first car, the first home we purchase. We plan for marriage and, perhaps, children. However, most Nova Scotians – most Canadians – never plan for the end of marriage. We’re especially unprepared for the end of long-term marriages, those that exceed 25 years.
Yet, according to Statistics Canada, divorce in Canada is on the rise and the highest rate of increase is between couples aged 50 and older, creating the term ‘Grey Divorce’. These separations are happening all over the world. In Japan, they call it ‘Retired Husband Syndrome’ and in Europe ‘silver separations’. Regardless of the moniker, this is a reality that isn’t going away.
What is happening to this demographic? There is no simple explanation. The baby boomer generation is the first generation with a significant number expected to live 100+ years. According to the Statistics Canada Census in 2011, the number of centenarians in Canada was up 25.7% since 2006. Compared to past generations, this generation is healthier and, as a result, have different ideas of what retirement life is or will be. Could empty-nest syndrome, combined with the fact that children are living at home longer, have something to do with this unfortunate phenomenon? Whatever the reason, we know that divorce is difficult at any age but the financial ramifications of divorce at the age of 50 or older are significant.
As a Qualified Mediator, I find that many people are misinformed about the financial implications of divorce. We may have the ability to Google everything but the abundance of information on the web can be extremely confusing, even for professionals.
Even worse than confusion about the legal technicalities of divorce, is the emotional strain arising from the end of a 20-, 30- or 40-year union. Some feel ashamed and never reach out to the right professional.
First, you must get proper legal advice from a Family Lawyer. Mediators cannot give legal advice, so my clients must understand their legal rights and obligations before examining all aspects of the divorce.
Here are some of the issues that come up in every separation and divorce:
- Can I afford to keep the house and/or the cottage?
- How do I analyze my cashflow so I know what my true expenses are?
- I am told by my lawyer that I’m entitled to spousal support – what does that look like in the short and the long term?
- Will I have enough to live on after I pay or receive spousal support?
- What are CPP credits?
- Do I have to split my pension?
- Not all assets values are the same now or long term (RRSP, pension, TFSA, etc.).
Here is the link to a more complete Divorce Financial Checklist.
It is important to work with someone who specializes in financial and divorce planning. Not all financial planners are experienced in the financial implications of divorce.