What happens to spousal support after retirement?
What happens to spousal support after retirement? BC SPOUSAL SUPPORT RETIREMENT LAWYERS at MacLean Law deal with the stressful situation of how separating spouses deal with a decline in a family breadwinner’s income. Our top rated BC SPOUSAL SUPPORT RETIREMENT LAWYERS handle cases of early retirement, involuntary retirement, voluntary retirement and cases where one spouse may wish to retire for less than bona fide reasons. Grey Divorce issues such as retirement and division of pensions and significant assets leave no room for error.
This area is complex and the court must carefully assess whether retirement should justify a downward correction or even cancellation of a support obligation. In cases where a recipient of support wants to retire the same thorough assessment needs to occur. Call our experienced and award winning team of Vancouver family lawyers today at 1-877-602-9900. We have offices located in Vancouver, Surrey, Kelowna, Fort St John and Richmond AND in Calgary Alberta.
Our BC SPOUSAL SUPPORT RETIREMENT LAWYERS understand that most people assume that once the traditional retirement age approaches, spousal support will end. While 65 has been quoted in many cases as a good faith retirement age, reaching this age does not automatically equate TO a stop in a support obligation. In today’s blog by Tal Wolf he gives you a great summary of what factors Judges weigh when retirement impacts a support obligation.
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Whether voluntary retirement constitutes a material change of circumstances for the purpose of varying an order for spousal support depends on a careful scrutiny of the individual circumstances of each case: Gajdzik v. Gajdzik, 2008 BCSC 160 at para. 35; Greco v. Greco, 2017 BCSC 172 at para. 30. Call the BC Retirement Family Lawyers at MacLean Law to discuss your plan. We’ll help make sure you have a workable strategy in place for defending your decision to leave the workforce before you resign from your job (perhaps blindly assuming you won’t have to keep paying alimony).
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In Vennels v. Vennels (1993), 76 BCLR (2d) 69 at paras. 31 and 34, Justice Coultas observed:
Retirement of a payor under a maintenance order usually results in a significant reduction of income. Courts are not guided by legislation to enquire into the circumstances of retirement. Courts have no power to compel people to work.
However, courts should, in the interests of justice, refuse to consider a reduced income resulting from retirement where a payor spouse has intentionally put him or herself out of the money in order to frustrate a maintenance order.
Any such deliberate self-induced impecuniosity constitutes deceit. . . . Even if the party’s motivation was not to avoid maintenance, the court will likely impute income so long as the party has the ability to earn an income.
BC SPOUSAL SUPPORT RETIREMENT LAWYERS EXPLAIN NEW CASE
Just a few weeks ago, the British Columbia Supreme Court in Falconer v. Falconer, 2017 BCSC 2355 addressed a case where the husband applied for an order terminating spousal support and reducing child support he was required to pay to the wife pursuant to a consent order dating back to January 2014. He also wanted the variations made retroactive to September 2016 when he had retired from the Navy. The Court found that he husband had made a personal choice to retire from the Navy after 20 years of service and to retrain for a new career as a plumber. Although he left the service well before the age or mandatory retirement, the wife acknowledged that during their relationship the husband had expressed an interest in plumbing when he retired:
51 Mr. Falconer has embarked upon a reasonable retraining program for a career he intended to pursue upon his eventual retirement from the Navy. In these circumstances, I find that the impetus for his retirement was a desire to change careers. That, rather than a desire to avoid his support obligations, was his principal motivating factor. However, I also observe that following the adjournment of his application of August 30, 2016, the respondent lost no time in unilaterally terminating his spousal support payments. I have no doubt that Mr. Falconer also perceived an opportunity, as a consequence of his retirement from the Navy, to eliminate payment of spousal support.
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Courts have just as readily, however, imputed income. In Szczerbaniwicz v. Szczerbaniwicz, 2010 BCSC 421, 18 months after the parties had entered into a consent order providing for monthly spousal support of $3,300, the 52-year-old husband, without advising his wife, voluntarily retired from the Armed Forces, where he held the rank of Lieutenant Colonel and earned $118,000 per year. Following his retirement, the husband enrolled in a part-time PhD program. He briefly held a part-time position as an instructor at the Canadian Forces College earning approximately $25,000 per year, but was unemployed at the time of hearing.
Justice Punnett found that the husband’s purely personal reasons for taking early retirement did not relieve him of his obligation to pay spousal maintenance. The court imputed an annual income of $90,000 to Mr. Szczerbaniwicz, taking into account his education, experience, skills and prior income, and the “dearth of evidence” regarding the employment opportunities available to him. The Court ordered the husband to pay spousal support, subject to a review when he reached the age of 60, the age of mandatory retirement from the Canadian Armed Forces.
In the recent case Greco v. Greco, 2017 BCSC 172 the 57-year-old husband and 54-year-old wife separated after a marriage of 26 years. Mr. Greco voluntarily retired from his work as a heavy equipment operator at Fort McMurray where he earned an average annual income of $202,000 over the three years preceding his retirement. He relocated to Vancouver Island, was unemployed at the time of trial and adduced no medical evidence to support his argument that his work in Fort McMurray had compromised his health. Ms. Greco worked as a labourer at a lumber yard, earning an annual income of $58,000. Justice Dorgan found Mr. Greco’s decision to reduce his employment income from $202,000 per year to zero constituted a material change in circumstances. The Court held that Mr. Greco had made the decision unilaterally and as a personal lifestyle choice and there was no medical evidence to support him retiring early. However, the court only imputed an income of 1/3 of his preretirement income and support was reduced accordingly.
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The bottom line is that if you are paying support to your spouse, you should consult with family lawyers experienced with retirement issues before you make that major life-decision. The BC Family Lawyers at MacLean Law will help you to evaluate all the factors the Court will consider in deciding whether the advantage to you in retirement substantially outweighs the disadvantage to your supported spouse. Among other issues we will look at the age and health of the parties; how the pensions and retirement assets were divided; whether the retirement would be reasonable; ability to continue to pay support and the supported spouse’s ability to support him or herself. If a payor spouse retires before the age of 65, then he or she is subject to a more rigid standard to have alimony terminated.
What happens to spousal support after retirement? Call our BC Spousal support retirement lawyers before retirement
Even if the court does find that there should be some type of modification, retirement, even at the age of 65, does not guarantee a total termination of alimony. It is possible for the court to only grant a reduction in support. Each case is unique and revolves around its own set of facts. Instead of going to Court, we may advise you to negotiate an Agreement with your former spouse for a reduction in your support obligation when you retire, or by a fixed period after the event occurs. Together, we will weigh the costs at stake, both financial and emotional and determine the right path for you. Call us at 1-877-602-9900 or request a consultation.