Separation and divorce is painful at any age.
For younger couples without children the path may be simpler, and there are usually fewer assets to divide. For those with children things get more complicated obviously, and separation usually means settling out parenting issues such as parenting time and decision-making responsibilities. These issues can become heated, but the reality of having young children is that you’re generally tied to each other until they reach adulthood.
But what happens later in life? There is an increasing trend of ‘grey divorce’ – couples over 50 who are splitting after 30, 40, or even sometimes 50 years of marriage. These couples often have grown children, and often even grandchildren, and may be retired from their careers. For a variety of reasons, one or both have decided to make a fresh start.
So, do things look different in ‘grey divorce’ cases? Absolutely they do! From the complicated property issues to potential pension complications, to elder care, and the realities of family interference, there are a whole host of issues that younger couples may never even consider.
In this two-part series, we’ll look at some of the issues that we commonly see with grey divorce, and what you want to know before making any decisions.
Property
While a young couple may own their first home, it’s not uncommon for older couples to own several properties. They may have the house in town, the family cottage an hour away, and the place in Florida that they like to head to for the winters. While generally only one is the ‘matrimonial home’ for the purposes of dividing property, there may be an argument that more than one property counts based on how they are used.
Dividing these properties is complicated because they often have emotional ties to the property. The matrimonial home may be the same home where the kids grew up, and debates over the future of that home can get complicated. One party may want to keep it and is forced to buy out the other’s share, and if they cannot do that, they may have no choice but to sell the home and divide the profits accordingly.
These decisions become even more complicated when children weigh in (as we will discuss more in Part 2). If one child has a particular attachment to the home, they may be pressuring one or both parents to make decisions based on emotion. While emotions can run high, they ultimately do not change the law or the financial realities of these situations.
Assets
Aside from the property, couples who have been married for decades have often amassed significant assets – some that they may not even remember exists? Cars aside, think about:
- The boat at the cottage
- The jetski down in Florida
- The art collection
- The signed sports memorabilia
- The safety deposit box sitting in the bank
For some couples, these sorts of items can be valued at tens, or even hundreds of thousands of dollars depending on their lifestyle, and if they both earned high incomes they may not have given living well a second thought. Now, however, dividing these assets can become a costly headache, especially if there’s an emotional attachment to any of the pieces.
These are just the assets that you remember! There are likely also investments, some of which you may monitor regularly and some of which you may have forgotten about completely. Your total assets may be divided through multiple banks, multiple investment firms, multiple accounts, maybe even in multiple countries. You will need to disclose all of these assets to provide proper financial disclosure when you’re separating.
Business
Shares in a company may be a matter of financial calculation, but what about couples that owned a business together? They may have started that business together or purchased a franchise. They may have had it for years and built up significant equity. What happens now – can that business truly be effectively divided? Can they continue working together?
Family lawyers may involve their corporate lawyer colleagues to unravel some of these issues. If the former couple can put their personal life aside and continue working together, the business may run uninterrupted. Otherwise, one party may be required to buy out the other’s interest in the business if the other wants to continue, or they may need to sell or close the business and sort out winding up the corporation and dividing its assets.
A Word About Pensions
While not all Canadians have pensions, they are common among both public sector, and private sector unionized employees. Many of these employees rely on these pensions to provide for them and their family in their retirement years. Yet if their family breaks apart in those later years, how is the pension divided?
That depends on the status of the pension. If the pension is active and the person has already retired, there is an option available to divide the pension at source, and so the pensioner receives their portion based on the division of assets. If, however, the pension is not active yet and that person is still working, that can become a point of contention and needs to be taken into account when structuring payments.
Lastly, couples who are separating have an option of equalizing their CPP credits. This is often overlooked during the process, but is important to note from a financial perspective. These divisions are permanent, and can be made even if only one partner had contributed to CPP.
Final Thoughts
This is simply an overview of some of the legal issues that come up in grey divorce cases, but the emotional issues can make things far more complex. In our next blog, we’ll look at some of the support issues involved, especially if one partner is in failing health, and how to navigate some of the contentious family issues that come up.