Managing Your Money

According to the Holmes and Rahe Stress Scale one of the most stressful events to occur in a person’s life, after the death of a spouse, is divorce – both these events leaving an individual “suddenly single”.  While the death of a spouse is generally expected to happen later in life, the statistics on the so-called “grey divorce” have been rising rapidly. The Pew Research Center in the United States found in their analysis of the 2015 American Community Survey that the divorce rate among American adults 50 and older has roughly doubled since 1990. And among those aged 65 and older, the divorce rate has roughly tripled since then. Canadian statistics are headed in the same direction.  Point in question, I recently helped separate the assets of a couple, both in their late seventies, after a 50-year marriage.

Becoming “suddenly single” through the loss of a spouse – whether by death or divorce, means navigating through emotional, social, legal, and financial challenges.  Fear about your financial future can be eased with proper planning and a good network of experts.  I’ll focus on divorce in this article, though many of the points will apply to the loss of a spouse as well.

In the case I recently dealt with, Bob and Mary (names have been changed) were both retired and had completely intertwined financial lives as would be expected after fifty years.  Bob had worked as an executive in a multi-national corporation and Mary as a physician.  They both had generous pensions, and significant assets. They also lived a very comfortable and generous lifestyle, helping their four children and donating a noteworthy amount to charitable giving.  While their combined income was high, so was their lifestyle, and having done a financial plan that ran through their retirement years, their children would still be left with a decent inheritance. Upon separation though, they nearly doubled their combined housing costs, and were forced to re-evaluate some of their individual spending choices. Their separation was amicable and respectful, and they worked together to decide on some of the expenses they would eliminate, especially when it came to their children and grandchildren. They both wanted fairness and agreed to separate their income and assets evenly, regardless of what their matrimonial regime stated.   To avoid the upkeep of the house, Mary decide to rent an apartment in a retirement community and Bob kept the house, paying Mary half the value. The reasons for the separation were built up over many years and had reached a breaking point. They ultimately came down to the need for freedom and the need for more fulfillment in life, especially in the remaining years.  Mary is now involved in a multitude of community activities and enjoying traveling with some widowed friends.  Bob is finding it slightly more challenging to adapt to the changes but is well supported by both Mary and their children.

When Bob and Mary informed me of their decision to separate, these were the some of the suggestions I gave them to prepare financially for the separation. While their situation was fairly straight forward, and they were cooperating to ensure fairness, unfortunately this in not always the case. These points don’t all necessarily apply in the case of a death of a spouse, but many of them can also be helpful in the financial preparation for the loss of a spouse.

● Make sure you have a personal checking account in your own name
● If you don’t already have one, open a credit card account in your own name
● Take stock of automatic bill payments from bank accounts and credit cards. Establish who will be responsible for those payments while separation terms are being negotiated
● Obtain your personal credit history report to be informed of any issues that may have occurred during the marriage as a result of joint debts or mortgages
● Set aside emergency fund in an account in your name to give you a cushion in the event of unexpected expenses or if financial negotiations take a long time
● Determine your budget
● Collect information on incomes
● Take stock of all assets and debts
● Review which assets which are jointly held
● Review your beneficiary designations on life insurance policies
● Update or create a new will
● Update your power of attorney for property and personal care
● If you have a family trust or private corporation, review the appointment of trustees and directors
● Create a new financial plan to chart your financial path for the future

When it comes to divorce, take the time up front to do your homework and research all of the available options. Then, choose the one that’s most likely to keep your divorce as peaceful as possible – for example, mediation over litigation. The more organized you are with your finances, the better you will be able to understand and negotiate your situation, ultimately resulting in the fairest settlement agreement. Don’t depend on friends for reliable information, rather seek out qualified professionals for advice. It’s like going to your friend for medical advice because you have both had stomach pain – there may be factors that make both situations totally different!  Often there are signs that a divorce may be on the horizon, so better to be proactive than reactive.

Becoming “suddenly single” can take a huge emotional toll, so by getting your financial affairs in order early, and ensuring that your financial situation is in your control, it can reduce some of the stress.  Having a strong team around you that you can trust will help a great deal, so speak to your Financial Planner, Investment Advisor, accountant, lawyer, and notary for support.  Feel free to contact me for a detailed checklist to guide you through more of the key items to collect, understand, and prepare for the transition of going from ‘two to one’.

Lynn MacNeil, F.PL. Vice President, Investment Advisor, is a Financial Planner with Richardson GMP Limited in Montreal, with over 24 years of experience working with retirees and pre-retirees. For a second opinion, private financial consultation, or more information on this topic or on any other investment or financial matter, please contact Lynn MacNeil at 514.981.5795 or [email protected]. Or visit our website at

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Richardson GMP Limited, Member Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.

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