“Grey divorce” is a term commonly used for those who divorce later in life, generally after the age of 60. While divorce or separation at any age creates some challenges, divorcing later in life presents particular financial concerns to those close to retirement or who have already retired.

Senior Divorce on the Rise

According to a 2018 article in the National Post, the rate of senior divorce is climbing in Canada, following trends in other countries, including the United States, India, Australia, and the United Kingdom. Between 1991 and 2008, Statistics Canada showed an increase of approximately 5 – 6 years in the age of people getting divorced. Last year, the Globe & Mail reported that the number of divorced Canadians over the age of 65 increased by over 80% between 2010 and 2020. While this rapid growth can be attributed in part to an increase in the number of Canadians in that age group, the marriage rate within the same demographic grew only half as much.

A number of factors may be contributing to this trend. For example, we collectively live for much longer than we once did. Canadians today live approximately 20 years longer than 100 years ago through improved medical technology and a focus on health-conscious lifestyles. This can make the prospect of staying in an unhappy or unfulfilling relationship for one’s entire life seem much more daunting than it once was. 

The Unique Challenges of Late-in-Life Divorce

A significant issue impacting seniors in a divorce is the lack of employment income. Many people getting divorced in this age group may be facing imminent retirement or may already be retired, meaning their ability to generate new income is severely limited (except for investments). For this reason, financial considerations are significant for those looking to divorce after age 60 or 65. 

Funding Retirement & Medical Care

Sharing retirement funds, such as an employer’s pension plan, can cause financial strain for both spouses after separating. Couples who must share their pensions after separation find they are now faced with funding two households using a fixed income that they originally intended to use together. 

As spouses age, they face other potential expenses such as assisted living or in-home care costs, significantly increasing their monthly expenses. However, through the separation and divorce process, the matrimonial home and family vacation properties may be sold, which can help each spouse fund their new lives apart from one another.

Changes to Life Insurance

When a couple is married, they are often the sole named beneficiary of one another’s life insurance policies. However, after a divorce or separation, one or both spouses may start new relationships and change the designated beneficiary to their new partner. In other cases, they may appoint their children as their beneficiaries instead. This is an important consideration, as the loss of a potential insurance settlement could be quite significant. Each spouse should be sure to discuss this issue as part of the separation or divorce process and ensure they are aware of one another’s intentions to adjust their future financial plan accordingly. 

Starting Over in a New Relationship: Cohabitation & Marriage Agreements

When starting a new relationship post-divorce, spouses should consider protecting their own financial security. This is particularly the case if they are no longer earning employment income. Further, if a person has children from a previous marriage, they may wish for most of their estate to pass on to their children after death.

For these reasons, divorced spouses should speak with a family lawyer to develop a comprehensive domestic contract, such as a cohabitation or marriage agreement. Domestic agreements are the best way to ensure that both parties in a relationship are on the same page regarding financial matters. They can reduce the risk of paying substantial legal fees in the event of a relationship breakdown or death. Whether you are moving in with a new partner or getting remarried, sitting down to create a detailed agreement will help you and your family rest easy knowing that a plan is in place, eliminating the potential for unpleasant surprises down the line. 

Post-Separation Estate Planning

Updating your estate plan after a significant life change, including separation, divorce, and moving in with a new romantic partner, is essential. This will help provide the peace of mind that your estate plan is in place and up to date while also protecting your will from future legal challenges after your death. If you want to be sure that your new relationship won’t negatively impact your grown children or that your estate will provide ongoing support for your new partner, this is an essential step to take.  

Contact Bortolussi Family Law for Advice on Property Entitlement

Bortolussi Family Law is based in Vaughan and helps clients across the Greater Toronto region navigate complicated issues relating to family property and equalization payment calculations after separation or divorce. Our experienced family lawyers also prepare marriage or cohabitation agreements for clients in a new relationship. Contact us at 416-987-3300 or online to schedule a confidential consultation about your family matter.