Divorces that take place when couples are nearing the end of their working careers present unique challenges. In many cases, any questions regarding support and access for children from the marriage are not a large concern. However, agreeing to terms regarding family property is often the most contentious aspect of a challenging divorce.
When you and your spouse consider divorce near retirement in Toronto, consult an experienced matrimonial lawyer at The Riley Divorce & Family Law Firm before making any decisions. Our attorneys could inform you of your rights and obligations and provide you with crucial information you need to make a reasoned decision about whether divorce at this time is right for you.
When a couple nears retirement age, the money and property they have accumulated and the income it generates is likely all they have to support them for the rest of their lives. If they divorce and must divide that property to support separate households, they might be left with too little to have the retirement they envisioned. Some people in this situation delay retirement for financial reasons.
Health is also a concern among people who divorce later in life. The prospect of a major health issue increases as people age. Even when you and your spouse avoid a major health problem, like a heart attack or stroke, over time, one or both of you might require additional assistance. When you divorce near retirement age, it is critical to consider these possibilities when dividing your family property in the Toronto area.
A lawyer like Paul Riley often works with couples dissolving their marriages later in life. He could ensure you have considered all the ramifications of ending your union and help you make informed decisions that will support you going forward.
Achieving a fair division of family property in Toronto could be challenging in any divorce, but it is more difficult when your prime earning years are in the past and retirement is near. You likely will have little opportunity to recoup the wealth your other spouse takes from the marriage.
On the positive side, if the matrimonial home served as the place where you raised your children and they are now grown, selling the property could provide the funds necessary to support two single-person households. Some couples nearing retirement also own a cottage or vacation property they could liquidate to generate funds for property division purposes.
The spousal support obligation could be significant when an older couple dissolves a marriage. When younger couples separate and divorce there is an expectation that the lower earning spouse will eventually become self-supporting. That is often not true for couples nearing retirement age.
If you or your spouse have little work experience or few marketable skills, a court might order significant spousal support for an indefinite period if the marriage lasted for 20 years or more. Factors judges use to determine spousal support are you and your spouse’s respective ages, the length of the marriage, and each of your incomes. Support could be determined based on preretirement income, so taking an early retirement or a less remunerative position is unlikely to reduce a spousal support obligation.
Private pensions, Canada Pension Plan (CPP), and other retirement funds are a part of your family property. In the case of a private pension, the Ontario Pension Benefits Act s. 67(3) allows courts to order the spouse who earned the pension to transfer a lump sum from the fund to the other spouse at the time of divorce. In the case of CPP, a process called credit splitting must occur when one spouse has earned significantly more during the marriage than the other. Paul Riley has significant knowledge of the credit-splitting rules to ensure your CPP division is accurate.
In Toronto, couples nearing retirement might have wills, life insurance policies, brokerage accounts, and other assets naming the spouse as the beneficiary, and in the instance of a divorce, these details could pose a challenge. When you neglect to change the beneficiary designations, you could inadvertently enrich your former spouse at the expense of a new partner or your children.
At our firm, Paul Riley could review your estate plan with you and note the changes you should make if you no longer wish your former spouse to benefit upon your death. When your arrangements require specialized knowledge of estate law, our network of financial experts could provide skillful assistance.
Couples nearing retirement age who divorce must be mindful of their ability to live comfortably without gainful employment. The retirement savings that would have supported one household must stretch to support two when you divorce. Dividing assets near retirement age requires knowledge and skill, and our team has years of experience to help you.
When you are considering divorce near retirement in Toronto, speak with our firm about your options. Reach out to our team today.
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