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Grey Divorce Retirement Capital and Spousal Support

Grey Divorce Retirement Capital and Spousal Support cases require a lawyer who can properly settle your case so you receive or pay a fair amount of spousal support. When people are at, or near, retirement age they are often justifiably concerned about being able to maintain their historical lifestyle with less monthly income coming in. Grey divorces are on the rise and MacLean law lawyers can help you find the silver lining in your grey divorce. Employment income is critical when spouses are younger and employed but when they are retired both spouses will need to draw on their capital and investment income to cover their living expenses.

MacLean Law has helped set the leading precedents for how grey divorce property division and support cases should be dealt with. Hiring a family lawyer who set the law for retirement income and grey divorce cases gives you a clear advantage in your Grey Divorce Retirement Capital and Spousal Support case. Contact us early on to protect yourself.

Finding The Silver Lining In Your Golden Years If You Separate 1 877 602 9900

People are now living longer and there is greater wealth to share between separated spouses. High net worth divorce lawyers with a skill set to win are as rare as hen’s teeth. In our blockbuster win in Devathasan, a 70 year old neurologist was ordered to pay our client $116.,000 a month in spousal and child support after she received nearly 25 million of assets and $1.5 million in costs against her husband for his misconduct during the case. Our firm’s leading Supreme Court of Canada case in Leskun spoke of the use of capital in cases to fund spousal support where a spouse’s income was nominal. This case is now being relied on more than ever by Canadian lawyers and judges to help people in their Golden Years maintain a lifestyle they were used to.

Grey Divorce Retirement Capital and Spousal Support 1 877 602 9900.

So when spouses are living off their capital, when both are retired, or both are unemployed but have assets, how do you calculate spousal support using the SSAG?

Grey Divorce Retirement Capital and Spousal Support
Grey Divorce Retirement Capital and Spousal Support lawyer Fraser and Lorne MacLean with Ana Banus paralegal

A recent article by academic Rollie Thompson sets out his summary of what cases practicing lawyers did to help guide him as a professor in teaching his students and other lawyers. Rollie Thompson regularly cites Lorne MacLean, QC’s Leskun trial win, where a wealthy husband was ordered to pay only $2250 a month despite a significant income and a long marriage and a later application to reduce that amount to explain how the capital assets of each party can be relevant to support later in life when one or the other has retired. In Leskun we won at trial for a wealthy executive in limited spousal support far below the low end of the SSAG guidelines.  In our leading case of Leskun v Leskun, 2006 SCC 25, Canada’s highest court held that capital is part of “means” and can be the basis for continuing to pay periodic spousal support even when there is little or no income being earned by the payor.

Vancouver Grey Divorce Retirement Capital and Spousal Support 1 877 602 9900.

In the Spousal Support Guidelines Revised User’s Guide, Chapter 19(e) at page 108, the government only briefly addressed these issues but Thompson recently stated:

The Spousal Support Advisory Guidelines offer income-based formulas for amount. Where both spouses are retired or otherwise living off their capital, the critical step is determining what incomes should be attributed or imputed to the spouses. In these cases, it will usually be the without child support formula that is being applied.

Entitlement issues can arise at this late stage. By retirement, many spouses will be approaching the end of duration, the end of entitlement. And, as income differences narrow in retirement, with or without the “double-dipping” concerns of Boston, then there will be questions about a spouse’s continuing entitlement to spousal support.

First, if older spouses have roughly similar assets after the division of property, a court can terminate spousal support and leave each spouse to manage their own assets to meet their needs, as in Puiu v Puiu, 2011 BCCA 480 and Salt v Salt, 2019 ABQB 595. Each spouse can then decide what investments to make to maximize their income and what pace to apply in drawing down their capital.

Second, in most low income cases with no assets, the spouses will be left to each rely upon their CPP, OAS and GIS, plus any other small amounts of income. CPP credits are divisible upon separation and divorce, thus narrowing the gap in CPP income, or even equalizing them in long marriages. The technical term for this is “Division of Unadjusted Pensionable Earnings”, a calculation done by the federal government on a year-by-year basis, with the unfortunate acronym of “DUPE”. Remember also that the Guaranteed Income Supplement (GIS) has its own clawback and any payment of spousal support may have an impact upon the GIS of the recipient.

Third, in a contested case where the parties have significant capital and negligible pensions, then it will be necessary to determine the incomes of the spouses to calculate the SSAG range. Where spouses have made reasonable investment decisions to generate income over the period of their retirement, courts have been willing to give spouses some leeway. Where capital is poorly invested, imputing a reasonable income may be required under s. 19(1)(e) of the Child Support Guidelines. Where a spouse has dissipated their assets, a court may also use that provision to impute a reasonable income to the assets they should still be holding.

Surrey Grey Divorce Retirement Capital and Spousal Support 1 877 602 9900.

Thompson went on to say:

At some point during retirement, most of us will have to draw down our capital to fund our expenses. In effect, that is what we are doing with the payment of an employment pension (which is a mix of income and capital) or payments from a RRIF (Registered Retirement Income Fund) or an annuity. If the parties mostly have capital left, if spousal support is still paid, to calculate the SSAG formula range, “incomes” will need to be determined. This will require a different kind of “imputing”, to estimate how much capital each spouse should be drawing down as “income” to fund their expenses and, possibly, to pay spousal support. There will be obvious tax issues to take into account at this stage.

Kelowna Grey Divorce Retirement Capital and Spousal Support 1 877 602 9900.

There are some non-retirement cases where the payor may have capital, but little income, like in Leskun. In these cases, the same sort of issues will arise in determining the payor’s “income” for spousal support purposes. The question is how is capital taken into account if the Spousal Support Guidelines are supposed to use differences in each spouse’s income to set a fair monthly support payment?

Notional Return On Capital At 3-5% 1 877 602 9900.

To understand how capital, and the return on it as investment income, is factored in courts may use a notional annual return on investment of 3-5%. We successfully obtained this result in the Devathasan case on assets of roughly $25,000,000 for each spouse.

MacLean Law handles highly complex and high conflict family law financial disputes with alacrity. You can speak with one of our Grey Divorce Retirement Capital and Spousal Support to get the solutions you need to settle your case.

Canadian Family Lawyers Can Help 1 877 602 9900.

High net worth grey divorces
MacLean Law is a national family law firm with offices across Canada. Our lawyers have received a number of awards and Lorne MacLean, QC was just named a Top 25 Canadian Lawyer

MacLean Law’s Grey Divorce Retirement Capital and Spousal Support lawyers have offices in Vancouver, Surrey, Richmond, Kelowna, Fort St John, Victoria, Calgary and Toronto.