The topic of grey divorce is increasingly important and relevant.
Statistics Canada reports a significant 80% surge in grey divorce among those over 65 from 2010 to 2020.* This is a substantial increase that demands our attention.
You have to wonder why this is happening.
Many I chatted with tell me there is greater acceptance of divorce and less stigma associated with it. Life is too short to be unhappy in the next third of your life. We are living longer, happier, and healthier lives, and the opportunity to re-partner is possible.
For some, the focus is no longer on the children or their careers, and relationships can become strained. Conflicts that once were suppressed rise to the surface and are challenged.
Upon the decision to part ways, a stark financial reality sets in. This includes equalizing assets, managing a fixed income, dividing retirement benefits, coping with increased living costs, and dealing with potential social isolation.
It’s no surprise that the demand for Chartered Financial Divorce Specialists has increased as grey divorce cases become more common.
Here is why:
Once you focus on the financial facts and strip away the emotion, you can make an informed decision. You can have your finances analyzed for various reasons including investment appropriateness, taxes, and estate planning, and the opportunity to collaborate with other professionals. It would help to have someone act in your best interest at a vulnerable time.
The fact is that divorce can escalate quickly and erode your settlement, sometimes with little to show for it. Emotions run high, and now is the time to decide how you will handle the process. Whether you collaborate, decide on mediation, successfully negotiate a settlement, or proceed with litigation or arbitration.
This process, regardless of the route you choose, boils down to full, true, and plain disclosure of financial facts so both parties can pick up the financial pieces of their lives and move forward.
In a recent HomeEquity Bank webinar, I spoke with Terri McDougall, a Chartered Financial Divorce Specialist. When asked about the struggles a client might face during a grey divorce, Terri voiced that “[the client] has no time to earn more income or collect more assets […] and all of a sudden you’ve only got half of that amount of money.” This drastic financial change can cause a disequilibrium for an individual, and advisors have an opportunity to help bring balance to their client’s lives.
As an advisor, you play a critical role in outlining the options. With a late-life separation, a CHIP Reverse Mortgage by HomeEquity Bank may be ideal for one party to buy out the ex-spouse from the matrimonial home. There would be no payments, no need to sell, and tax-free cash, and clients would never owe more than the value of their home at the time of sale.1
As a bonus, you have an opportunity to maintain relationships with both former spouses, a portfolio that can largely remain intact, and assets that continue to appreciate.
This is a challenging time, and as an advisor, helping clients get through this difficult period with the goal of securing their financial future is a powerful endorsement of your service.
Interested in learning more about how a CHIP Reverse Mortgage can help with financial recovery after a client’s grey divorce? Speak to a HomeEquity Bank Business Development Manager (BDM) to get more information or generate a quote for your client. Find your closest BDM here: https://www.chipadvisor.ca/bdm/
Need more information on the value a Chartered Financial Divorce Specialist can provide in grey divorce and the key considerations for financial professionals when clients divorce? Reach out to your BDM to access the recording of our September 2024 webinar, which will enhance your expertise to better serve your clients.
Pattie Lovett-Reid
Chief Financial Commentator
HomeEquity Bank
*Source: The Globe and Mail
1With HomeEquity Bank, every reverse mortgage comes with a No Negative Equity Guarantee,2 which means that the amount a client is required to pay on the due date (excluding some items) will not be more than the fair market value of their home.
2As long as clients maintain their property, pay their property taxes and property insurance, and their property is not in default. The guarantee excludes administrative expenses and interest accumulated after the due date.
