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Tips for Navigating a Grey Divorce

By Anita Phillips

Melinda and Bill Gates’ retirement plans likely won’t suffer a hit following their divorce, but it’s something couples should think about when they dissolve a long-term union.

Grey divorce — a term to describe a marriage that ends later in life — is on the rise: Research shows that, since 1990, the divorce rate for adults aged 50 and older has roughly doubled. We see this trend reflected in our firm’s client base; about one-quarter of the people we work with on divorce files are comprised of older Canadians.

In this post, I’ll explore the challenges as well as the opportunities for people facing a grey divorce and highlight some key legal considerations if you find yourself on this path.

But first, why?

People change: In the many years that I’ve been practising as a family lawyer, there’s one thing I know for sure: The person you were in your twenties is not the same person you are in your fifties. In other words, people change, they grow apart and, sometimes, they realize they want a different life from their partner of the last 20 or more years.

Delayed divorce: Anecdotally, I would say this is one of the most common reasons for a mid-life and beyond divorce. Long before their marriage ends, many couples realize they’re not well suited, but they decide to remain an intact family for their children. This happened in our family: Like Bill and Melinda Gates, my parents divorced when their youngest child started university. Kids are often the glue keeping parents together and, once they’re gone, it’s officially “my time” for one or both partners.

Different visions of the future: Sometimes, couples realize as they approach retirement that they have different expectations of the next chapter. One intends to travel the world as an eco-tourist, but the other wants to stay home and golf. Knowing that time is a finite resource, they decide to choose their own adventure.

The overarching theme is that, once the kids leave the nest, many couples realize it no longer makes sense to stay together. We know they don’t make the decision lightly. There’s a lot at stake and it’s important to have clear guidance and support as you navigate the process.

Financial headwinds ahead

A later-in-life divorce can come with serious financial implications that must be carefully navigated. As retirement approaches, couples need to think about how their reduced income will impact a financial settlement. Separation represents a dramatic change for any couple, but it can be particularly disruptive for people in the final phase of their careers. There are several important considerations, including:

  • How will your assets be divided?
  • Will you need to sell the family home and relocate?
  • Does it make sense to delay retirement?
  • Will one spouse have to re-enter the workforce?
  • You may need to adjust your lifestyle expectations.

Another complication for some couples is when one spouse owns a business. In these cases, we typically bring in a certified business valuator to better understand the value of the asset. That informs the best course of action to take with the business, which may include selling it, winding it up, or keeping it going for a few years longer than originally planned.

Scale back retirement expectations

The process of dividing assets that have accumulated over many years can be complex. At this juncture in a couple’s life, the marital home is often paid off, there may be pensions, retirement savings, investments and income properties to divide.

With some couples, one spouse has stayed at home to raise the children while the other spouse worked. Now the working spouse is retiring and the couple is divorcing, but there’s no longer employment income that can be divided for spousal support. In a case like that, we would want to ensure that all private and government pensions as well as the investment income is shared equitably, in addition to dividing other assets as part of the financial settlement.

With asset division, there are tax consequences for the payer and the payee. In our practice, we frequently work with financial advisers and tax professionals who help clients understand the tax treatment of their asset split as well as income tax implications.

As an accredited family mediator, I often work with couples to come up with creative, outside-the-box solutions for how assets can be divided. Step one is to understand your specific situation and your goals. Not only does settling your separation and divorce outside of the court save you time, money and headaches, it also gives you more control over the terms of the agreement.

In a negotiated settlement, you can tailor it to your family’s specific circumstances. For example, you and your spouse might decide that one of you will stay in the family home while your youngest child finishes university and then you’ll sell the house and split the proceeds. 

The upside of grey divorce

Many people who divorce later in life feel they made the right choice for a fresh start. As it turned out, my parents’ split was the best thing that ever happened to them: It gave them the opportunity to rediscover themselves and thrive in their new lives after years in an unfulfilled marriage.

In some cases, the transition to single life can be awkward and frightening, especially if you’re re-entering the workforce after a long hiatus. But remember, you weren’t happy and now you have a blank slate where you can reinvent yourself. Many of my clients find new careers, start new businesses, and find the happiness and love they were missing in their marriage, after their divorce.

If you’re considering a divorce and would like to discuss your options, I’d love to hear from you.

Let us help you navigate life's changes and challenges. Set up a confidential consultation today.

by Anita Phillips

Anita Phillips has extensive experience as a family and estate law lawyer. She has particular expertise in negotiating and drafting domestic contracts and in developing estate plans for clients with blended families and for business owners.