The Grey Divorce

Courtesy of SunLife Financial, Posted 20 Jun 2014

Ending a marriage when you’re past 55 presents unique challenges, especially when it comes to your personal finances.

Separating from his wife after 41 years of marriage was the most difficult decision of Jack’s* life. With three grown children and most of his working life behind him, Jack spent hours in counselling and nearly 10 years grappling with the options before moving out into a small apartment.

“When you get to be 65, you want to say ‘I’m in a pretty good place’ — and we both weren’t saying that,” he said. “It’s not all roses. I really miss the family, I miss our shared history.”

Jack decided to pursue a legal separation from his wife rather than a divorce so she could continue to receive medical benefits through his employer. They came to an agreement and remain on friendly terms.

Financial considerations of grey divorce

There are unique challenges facing those who opt to divorce later in life, including understanding and taking ownership of personal finances. Here are some important considerations for those dealing with a separation:

  • Inventory your assets. Collect details about your personal financial situation — tax returns, year-to-date pay stubs, benefits statements from your employer, insurance policies, pension statements and information on all registered accounts (RRSPs/RRIFs, TFSAs and RESPs). Pull together information surrounding family real estate — current property assessment and the property tax statement for the family home, cottage, rental properties, utility bills, receipts for maintenance or repair work and statements of rental income and expenses for all properties.
  • List your liabilities. Compile information for all outstanding loans and debts other than a mortgage, such as lines of credit, credit cards or car loans. A comprehensive overview of what you own and what you owe will help you make decisions about the future. 
  • Update your beneficiaries. As with any big change, it’s important to keep beneficiaries on investment accounts and insurance policies up to date.
  • Consider consolidating. After separation, it can be common to find assets in several different places after taking full ownership of your accounts. Consolidating with one trusted advisor has many advantages. An advisor will make sure you take care of things like changing beneficiaries on insurance policies or RRSP accounts. Bringing all your investments together under one roof may also qualify you for reduced management fees.
  • Update your will. Revisiting your estate plan is a good idea to ensure your will falls in line with your new circumstances. Consulting a lawyer you trust can help ensure your intentions are effectively updated and captured.