Costly Decisions

Costly Decisions

In 2014, a client of mine asked me what he and his wife should not do if they wanted to build their wealth.  My immediate response was, “don’t get divorced!”  My answer was based upon what I had observed in the lives of relatives, friends and clients who had experienced divorce firsthand.

This blog is not about the sad stories that lead up to the dissolution of a marriage.  This story is designed to share information about the process to get to divorce once the decision to divorce has been made.  It is very rare for a divorce to be truly amicable because the decision to marry in the first place was made with the vow, “till death do us part”.  The emotion of the decision to split often carries over to the practical aspects of dividing up money, retirement funds, the marital home, pensions, the family business, and time with children.  Another practical consideration that enters the debate is spousal support. 

For many couples that get married young, their wealth was probably negligible.  As time marches on, the combined accumulation of wealth can be quite impressive for some and perhaps not so in other cases.  Regardless of the amount of wealth acquired, the legal process for all divorces in Canada is generally the same.

In 1697, William Congreve wrote a play called the “The Mourning Bride”.  The famous line, “Heaven has no rage like love to hatred turned, nor hell has no fury like a woman scorned”, speaks to the rage a man or a woman can show when profoundly hurt or disappointed by someone they love or care for.  Most of us have witnessed divorce battles rage, sometimes for over a dozen years, for reasons that only make sense to the battling couple.  The battle is not for restitution, but for other reasons unfathomable.

The financial costs often go into the tens of thousands of dollars, and not uncommonly into hundreds of thousands of dollars in legal fees alone.  The psychic and physical toll on the combatants is incalculable.

In Canada, there are three categories for divorce to be granted:  1) fighting over money or property, 2) adultery and 3) cruelty and violence.  Once it is determined that a divorce will proceed, the concept of “No fault” comes into play.  This is important because once it is determined that the marriage is over, two legal jurisdictions come into play for the divorce to go into effect.  The federal laws that govern The Marriage Act take over for the questions of support, for both child and spouse.  The provincial laws govern the division of property.   

The topic of divorce is complicated and emotionally charged.  According to Stats Canada, just over 50% of all marriages end in divorce, with the average length of marriage before divorce is 8 years.  When we calculate common-law relationships into the mix, the split up of relationships goes up significantly and the average length of co-habitation goes down substantially.

This relational malady is incredibly costly for families and our communities.  My new service as a Chartered Financial Divorce Specialist, is to provide a complimentary service to those provided by the Family Councillors and the Family Law Specialists.  My job is to dispassionately calculate the division of assets in a variety of ways.  My hope is that these financial options will help the divorcing couple create the framework for a good divorce settlement saving all concerned time and money.