Couples who divorce later in life may have a newfound emotional freedom, but it may come at a hefty financial cost. Divorce is ruled by family law in Alberta, which spells out how a couple’s assets and debts should be divided upon separation or divorce. When couples divorce after many years of marriage and when the people are 50 years of age or older, grey divorce, as it is known, can seriously impact each person’s pocketbook.
Statistics Canada data shows that the highest rates of divorce in the country are among older couples. Some of these couples have already started using their retirement savings and if there is no income flowing into the marriage and assets have been divided, each may need to use those assets to stay financially afloat. If they own a home, most experts suggest selling it to increase their income. If one spouse pays the other support, any pensions are considered income and so taxed as income for the payee and can be claimed as a deduction by the payor.
Seniors who divorce always have the possibility of facing a lower living standard, so it is crucial that each person understands the choices he or she has. Knowing how to budget moving forward as single individuals, experts suggest, will go a long way toward helping financially. There are ways to free up equity in a divorce situation.
A lawyer who is experienced in Alberta family law can help a senior client going through divorce. A lawyer can further explain issues tied to finances like spousal support and the division of property. Divorce can be difficult, but understanding that there are options may make it less financially intense.