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Preserve the lifestyle you’ve worked hard for so your golden years aren't tarnished during a grey divorce.

  • What is “grey” divorce”?

  • What happens to the family home and other properties?

  • Will a divorce later in life affect my retirement plans?

  • How will a divorce impact my pension income?

  • How much and for how long is spousal support paid?

What is “grey” divorce”?

Although divorce statistics are on the decline overall, divorce among those 50 years of age and older is on the rise. “Grey” or “silver” divorce simply refers to a demographic trend in the separation and divorce of older couples who have been married for many years.

If the grey divorce, high Earning Spouse is continuing to work in their business or their place of employment,on separation later in life, the partners will need to look at the income of the parties and discuss Spousal Support awards. If the other spouse has not worked and they are in their 50’s or 60’s, it is likely that they will be unable to ever become fully self-supporting, depending in part on the amount of the family property. Often in traditional marriages, there may be spousal support orders that remain in full force and effect up until retirement age.

Grey divorces often involve couples who have accumulated significant assets over their long-term relationship. They may also have received inheritances from their parents and wish to consider passing some of these assets to their children, all of which requires special consideration.

What happens to the family home and other properties?

Married or common-law spouses who have lived in a marriage-like relationship for at least two years, equally share any property they have (including jointly) during the relationship. The main exception to this is the starting value of property they each already had before the relationship, known as “excluded” property, and property acquired after the relationship, when it is unrelated to property acquired during the relationship. Note that although the starting value of excluded property is not divided between the married or common-law spouses, any increase in the value of the excluded property during the relationship is shared between them.

The matrimonial home is sometimes the biggest asset, and has special considerations because of emotional connectivity, age of children, and the options and feasibility to obtain a mortgage late in life.

A matrimonial home does not have to be just one house, and may include vacation properties, extra condominiums, or even a yacht. However, in order for these properties to be considered a matrimonial home in the case of property division, each property must be ordinarily lived in for a portion of the year.

In family property division cases, the value of the property is based on fair market value and the default date for the determination of value is the date of the trial or agreement dividing family property and family debt. Market increases or decreases after separation will likely be shared equally, although gains or losses made solely by one party’s efforts or malfeasance may lead to the court using a different date than that of trial.

Will a divorce later in life affect my retirement plans?

Every grey divorce couple should take time to fully understand the financial outcomes of divorce later in life. It is critical no mistakes are made because there is no margin for error financially when one or both spouses are entering their golden years of retirement. There are often financial strategies that have been put in place when the spouses are together that may be impractical or unfair, when the spouses separate and assets are to be divided.

MacLean Law works with financial management specialists to determine the best outcome for each of their clients, as there may be situations where retirement plans have to be adjusted to continue supporting a lifestyle they have been accustomed to living.

How will a divorce impact my pension income?

Pensions are a type of family property. If you separate or divorce, your former spouse may be entitled to a portion of it under the Family Law Act.

There are two different scenarios regarding pension and divorcing couples. The first is the Canada Pension Plan (CPP) contributions you and your spouse or common-law partner made during the time you lived together. These can be equally divided after a divorce or separation. This is called credit splitting.

The second is the private and public sector pensions which can sometimes be a separating couple’s most significant family property asset. Note that different rules apply if the pension contributions have started to be paid out.

An equal division of CPP credits earned during a relationship is mandatory unless both parties elect not to divide the pension. For example, if both parties have made maximum contributions during the relationship.

The Family Law Act has very clear guidelines regarding how pensions are to be divided. The spouse without the pension receives one half the value of the pension that was earned during the time of the relationship.

An alternative, if both parties agree, is that the plan member can buy out the interest of a spouse. This way, the plan member can keep the pension in-tact and the spouse can be compensated with other family property. Claiming, opposing, or buying out a pension, often requires the services of an actuary, and may require valuations of other family property. We can help you find the right resources and provide guidance so you are aware of your rights on pension and property division issues.

How much and for how long is spousal support paid?

Each divorce is unique in terms of whether spousal support is payable or not, and if so, how much, and for how long spousal support will have to be paid.

Whether or not spousal support is payable by either spouse depends on a number of factors, for example:

  • Your role during the marriage;
  • If you’re able to support yourself now, or need money to do so;
  • Whether you earn a lot less than your spouse
  • Whether there is a previous agreement about spousal support;
  • The assets you may receive upon division of family property.

If spousal support is payable, the Spousal Support Advisory Guidelines suggest appropriate ranges of monthly support, depending the spouses’ respective incomes. Note, these guidelines are not law, but the court must at least consider them.

The Guidelines also suggest a duration for spousal support, based in part on the length of the relationship. This is an important issue in grey divorce, as both partners move to retirement, and often have less income, and may need to use their pensions and other retirement savings. The goal, regardless of stage and age, is for each person to be able to support themselves.

MacLean Law recommends that separating couples obtain a lawyer to determine the best course of action so that each spouse can enjoy their golden years of retirement.