While divorce rates have remained steady over the past few years, “grey” divorce — those involving couples aged 55 and over — has been on the rise, says Eva Sachs, divorce financial consultant and co-founder of Mutual Solutions in Toronto.
The increase in grey divorce may be due to the sheer number of baby boomers, which is creating a population bubble in that age group, according to Sachs. And, since the baby boomers are now living longer, a 55- or 60-year-old in an unhappy marriage may still be looking at 30 or more years with their partner.
Boomers also represent a generation in which more women have been working than ever before, says Marion Korn, family lawyer and co-founder of Mutual Solutions. Because women from this generation are more financially independent than women from previous generations, they may find it less daunting to face their senior years without a partner.
Here are three tips for preparing your clients for a grey divorce:
1. Remain impartial
Sometimes a financial advisor will have a stronger connection with one spouse, and indirectly favour that client as a result, Korn says. To be a trusted advisor to both parties, you should remain as neutral as possible.
You can put your clients at ease by communicating your impartial position. Korn recommends you tell your divorcing clients: “I can support you both by being the go-to person for providing all of the facts that are going to be needed. I can do this in a very fair-handed way and guide the process so that it doesn’t cost a fortune or diminish assets.”
2. Prevent costly fights
One of the biggest mistakes divorcing couples make is aggressively trying to “protect” themselves by lining up lawyers and court proceedings. Instead of building walls, clients should be working to create meaningful conversations, Korn says.
Remind your clients that separation is a process and not an event, Sachs adds, and it can be accomplished without fighting. Clients just need to know how to prepare themselves, from a practical perspective. Legal battles are a bad investment, especially for older clients, Sachs says, particularly considering that growth in their assets will be slowing down.
Adds Korn: “A very expensive divorce has zero return.”
3. Incorporate estate planning
Clients aged 50 to 60 years old who are planning to divide their property need estate-planning advice, Korn says.
If both spouses are retired and drawing on their investments, Sachs adds, then you should help them to be as tax-efficient as possible. As a financial advisor, you can play a critical role as part of their divorce team by providing the necessary resources.