Divorce carries a financial toll, and divorce in later years can carry a greater risk. According to Statistics Canada, the ‘grey divorce’ trend reveals a growing number of seniors over 65 who are divorced (49.7 per cent increase 2006-11). One may speculate that longer life expectancies may be a reason for this. One spouse may decide they do not wish to spend the next 20 to 30 years in an unhappy situation.
We often hear not to let our emotions affect our investing decisions; in the case of divorce it is especially important not to let your emotions make decisions that will affect your future finances. You may wish to keep the home you have lived in, but will the trade-off make sense? The assets you give up to buy your spouse’s ownership may cause it to be unaffordable in a few years. Your initial thought may be to keep the home but make sure that it is a financially sound decision, not emotional.
What about health care? Will you still be covered under your ex’s benefits? Will this change if either one decides to remarry? Other items for consideration if one or both remarry at some point in the future includes updating wills, discussing monetary legacies to the children from the previous marriage and what happens to real property. You may wish to leave your house to your children, but what about the step-spouse? How long can they live in the house, will they have the means to buy out the children, or does the house have to be sold and the proceeds divided?
Pensions are very important, it may be that one spouse has a work pension that starts paying at age 65 for the rest of their life. What portion of the pension does the other spouse deserve? They may have worked for many years at a job that did not offer a pension plan, or a number of years were stay-at-home to raise the children. Contributions to the household were large, but there is no “rest of their life” pension plan.
Consult a professional to know your rights and what would be a fair distribution of matrimonial assets. Divorce always takes a toll, emotionally and financially, but it is also a turning point to living the rest of your life to the fullest.
Carol Plaisier, CFP, Investment Advisor with DWM Securities Inc. & Insurance Advisor with Dundee Insurance Agency Ltd. can be reached at the DundeeWealth in Parksville 250-248-2399, cplaisier@dundeewealth.com or www.carolplaisier.com. This is not an official publication of DWM Securities Inc. and the views are those of the author alone, and they have not been approved by, and are not necessarily those of DWM Securities Inc.
