February 27, 2018

Grey divorce: Eight reasons why older separation and divorce is more complicated

Grey divorce: Eight reasons why older separation and divorce is more complicated

Written by: Jennifer Shuber

Divorce does not discriminate. It happens in short marriages (the so-called “starter marriage”), in medium length marriages (8 to 20 years), and in long-term marriages (20 plus years) as well. Couples who are very young, middle-aged and older can all be affected. The phenomenon of grey divorce is when people in their 50s and older separate. There are special considerations in a grey divorce.

Here are some of the major reasons why spouses who are over 50 and considering a separation or divorce should consult with a family law specialist.

1. Separation and divorce are complicated, but even more so when you separate later in life

This is due in part to the way the law divides property and the information necessary to accomplish the division. Producing documentation to support assets owned on the date of marriage becomes difficult when banks do not save records indefinitely.

2. Retirement plans are severely impacted by a separation

One spouse may be forced to deplete retirement savings to pay out the other spouse. Plans for retirement may have to be delayed. It may no longer be affordable in this new financial landscape where the income earner is now paying spousal support.

3. Life insurance becomes an issue

Obtaining and maintaining life insurance is more difficult as people age. Life insurance may be required to secure support, such that the policyholder no longer has the discretion to name whoever he/she wishes as a beneficiary of the policy.

4. The parties’ wills and estate plans are impacted by separation and divorce

Devises and bequests to a former spouse are no longer valid once the parties are divorced. What one spouse was prepared to bequeath to the other pre-separation rarely remains the same post-separation. Long-term care plans and powers of attorney need to be re-evaluated. Finally, a separation agreement might limit a spouse’s rights in his/her will, so both documents will need to be reviewed to ensure that they dovetail with each other.

5. Many retirement-age individuals have pensions

A pension is considered as property for the purposes of property division and equalization. A pension is treated differently depending on whether or not it is being paid out when the parties separate. There are also Canada Pension Plan (CPP) and Old Age Security (OAS) pension to consider. The law around pensions is complex. Parties often require legal advice to understand and resolve pension issues.

6. For individuals who are either further along in their careers, or retired, determination of a spouse’s income for support can be complicated

If a spouse earns a straight salary, then establishing salary is pretty straightforward. But what about a senior executive with many different kinds of remuneration, including stock options, restricted stock units, executive compensation packages, vehicle and meal allowances? It is important to understand how the court will determine income.

7. Older parties have additional financial responsibilities upon marriage breakdown

The spousal support owing might be more than the recipient spouse ever spent during the marriage and more than was budgeted for. Separated parents must pay proportionately for a child’s post-secondary education where there is no such requirement for married spouses. The spouses may not have accounted for this. It is also unlikely that the individual has put aside funds to cover legal and accounting fees in the event of a divorce. These can add up. All of these financial issues must be factored into a settlement.

8. Extended health insurance is an issue for older parties

Both spouses may want the coverage to continue, but divorced spouses frequently cannot cover each other on extended health and dental plans. How that coverage is either replaced or accounted for in the settlement is crucial.

If you are considering separation or divorce, and the above applies to you, then your best bet is to retain a family law specialist who can consider your particular circumstances and advise you on how best to proceed. It is worth the investment to get it right the first time. Knowing your rights, obligations and entitlements will reduce stress. Learn what the law is and how it will affect you. Knowledge is power.

Jennifer Samara Shuber practices exclusively in the area of family law, advising clients on a wide range of issues relating to marriage and marriage breakdown. Do you have questions about this topic? Email Jennifer at jshuber@beardwinter.com or call her at 416-306-1742.

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