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Alternative dispute resolution ideal for high-net-worth divorces

by Stephen Morgan

More money doesn’t have to mean more problems when it comes to divorce. 

As the average age of divorced individuals rises across Canada, more couples are dealing with complex assets as part of their split, including businesses, professional practices, retirement funds, investment property and stock options. 

Courts are not always the best place to untangle these kinds of property, which is why couples with high net worth should consider methods of alternative dispute resolution (ADR) for their divorce.   

Grey divorce trends 

In the last 30 years, Statistics Canada reports that the country’s overall divorce rate has plunged. In the early 1990s, roughly 13 of every 1,000 married people divorced each year, but by 2020, the most recent stats available show that the rate has more than halved to just 5.6.  

Over-50s bucked the trend though, especially between 1991 and 2006, when the divorce rate for older Canadians increased steadily from 4.2 per 1,000 married people to 5.3, before plateauing at around that level in the last decade or so. 

Experts are divided on the causes of the trend, with some suggesting the Baby Boomer generation is more prone to divorce than previous generations, but it may also have something to do with legislative changes that have simplified the divorce process over the years.   

Whatever the reasons for the grey divorce boom, it has left us with a large number of aging spouses preparing to go their separate ways after accumulating substantial wealth and assets together. 

In my experience older wealthy couples are generally more open to alternative dispute resolution methods such as mediation, arbitration or collaborative law for handling their separation for several good reasons. 


No matter how healthy your finances are when you divorce, studies suggest that both parties can expect their standard of living to drop after the split, with female divorcees facing particular challenges to recover their financial position.

The financial shock to the system is felt hardest post-divorce by spouses in marriages with a disparity in individual income levels, or where one partner had less control over the finances.  

ADR processes help parties start their new lives on the right financial foot, leaving them with final bills that typically pale in comparison with contested divorces in court. 

Creative solutions

If couples can maintain a sense of trust during their split, processes such as mediation and collaborative family law can allow them to craft solutions that work for both of them.

Tax matters are one area in which separating spouses with substantial assets can reap the largest savings since the court’s reliance on prescribed formulas tends to make its handling of matrimonial settlements quite clumsy. 

By working together in some sort of non-litigation process – often with the help of accountants – the parties can come up with a mutually beneficial plan, framing certain transactions and payments between them in a way that reduces the amounts of capital gains or income tax payable. 

Retirement assets such as RRSPs also play an important role in many negotiations, since provisions allowing for a tax-free rollover at the time of separation usually make it more attractive to transfer funds between spouses, rather than simply liquidating the accounts. 

For spouses who are also in businesses together, the client-centric nature of ADR processes allows them to cut out some of the complexity and cost that comes with proceeding in court. For example, I recently acted in a case where the couple agreed for the wife to buy her husband out of the company they built together based on a review of their accounts, rather than obtaining an official business evaluation, saving themselves anywhere between $10,000 and $60,000 in the process.

In addition to the monetary savings, the cooperative flavour to ADR processes tends to bring down the level of animosity that characterize many divorces.

When privacy is paramount

Nobody likes having personal and private details of their life dragged into the public, and high-net-worth individuals are no different.  

Often, those with commercial interests of their own will know from bitter experience that litigation can be an ugly affair. Even if it doesn’t start out that way, the adversarial nature of the process means it’s easy for small disputes to escalate into full-blown war. Even worse, all of the specifics are documented in minute detail at a local courthouse.   

Business owners or professionals such as lawyers, accountants and doctors also tend to prefer the privacy of ADR processes in order to stop the spread of panic that can occur when business partners feel like they are being dragged into another person’s family dispute in open court. 

If you are considering a separation or divorce and would like to learn more about your options for settling outside of court, give us a call at Morgan and Phillips.

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by Stephen Morgan

Stephen Morgan practices exclusively in family law and is highly skilled and experienced in litigation. He aims to guide clients through a difficult and stressful time in their lives with understanding, support, and practical advice.