Your older male client who is in a December-May relationship may give the term “dear old dad” new meaning. Like Pierre Trudeau, Michael Douglas, Jack Nicholson and Paul McCartney, he may become a parent when he is well over 50. Although Statistics Canada does not keep figures on the age at which Canadian men become fathers, with about 37% of marriages now ending in divorce, many men are starting over with younger women.

Parenting is always challenging, and late-life parenting can be especially so. Hopefully, your client has considered beforehand the implications it will have on his lifestyle and his finances.

“As we get older, our energy decreases and our emotional rigidity increases,” says Halifax psychologist Jason Roth. “Even if your client has the energy to deal with a toddler at the age of 52, will he be up to enforcing curfews at 67?”

Roth identifies three types of late-life fathers. The first is the man who agrees to father a child because his younger partner wants to be a mother, but he doesn’t get involved in parenting himself. The second is the man who is excited about becoming a father because he wasn’t able to be an active parent in the past because of divorce or a busy career. The third type is dismayed by his young spouse’s transformation from a mate to a mother. “This last situation can result in serious marital problems,” Roth says.

The client who becomes a father on the brink of retirement needs to take a hard look at his financial plan. Sandy Cardy, senior vice president of tax and estate planning at Toronto-based Mackenzie Financial Corp. , notes there are a host of financial issues that late-life fathers should consider. “Financial advisors can take the role of quarterback, revising and co-ordinating the financial plan,” she says. “Advisors may want to bring in a tax lawyer, an accountant and an insurance specialist.”

For example, your client probably will have more assets than his younger spouse and may want to protect them in case of a marriage breakup. “A spouse who moves into your client’s home is entitled to 50% of it upon marriage breakdown,” Cardy says. “Many people today have a lot of their net worth in their homes, perhaps $700,000 or $800,000. Your client should consider a marriage contract that excludes the home from division.”

Marriage or prenuptial contracts can also set out arrangements for financial support, dealing with debt, raising children and protecting the interests of children from a previous marriage. Common-law couples can use cohabitation contracts for these purposes.

Having children at mid-life and beyond may mean postponing retirement, Cardy says. To ensure there are enough assets to support children and, perhaps, a stay-at-home wife, your client’s investment strategy will probably have to be revised. “With a young family to support, a client may want to consider a slightly more aggressive portfolio, with mid- to high-risk tolerance, depending on comfort level,” Cardy says.

Survivors’ Needs

Men who become fathers later in life are more likely than younger fathers to die before their children are grown. As a result, they will want to ensure their survivors’ financial needs are met. “There’s a big responsibility in bringing a child into the world, knowing you may only be around for his or her first 10 years,” says Peggy Grall, a transition coach in Milton, Ont.

Life insurance is important, although, as Kathleen Clough, an investment advisor with PWL Capital Inc. in Toronto, notes: “The older you get, the more expensive life insurance becomes.”

“Or your client may already have life insurance but may need to augment it,”Cardy adds. “And you’ll want to discuss disability insurance with him to protect against loss of income as a result of a serious accident or illness, and long-term care insurance to fund possible long-term care down the road.”

It’s even more important to keep credit card debt down as you get older, she notes, in case a disability prevents the client with a young family from earning an income.

Education planning is also essential for older parents who may not be around to pay tuition or who may not be earning a salary when their children go to university.

A client with a younger partner can take advantage of some tax-saving strategies, Cardy says. By December of the year he turns 69, he will have to move his RRSP investments into a RRIF and begin paying taxes on the amount he is required to withdraw each year, an amount determined by his age. But if he doesn’t need to withdraw a lot from his RRIF each year, he can trim his tax bill by basing the required minimum withdrawal on his younger spouse’s age.

@page_break@Late-life fatherhood can be particularly complex in a second marriage that produces a blended family of his kids, her kids and their kids. Blended families present special estate-planning concerns, starting with making sure the will is up to date. “If your client is only separated from the mother of his adult children and is living common-law with his current partner, separation does not void a will made during the marriage,” Cardy says. “He’ll need to look at whom he wants to name as beneficiaries in the will, beneficiaries of his RRSPs and of his life insurance. He’ll have to make sure financial and personal powers of attorney are updated.

“And if he’s divorced and remarried, he may have to be reminded that remarriage completely voids the will made during the first marriage,” she adds. “If he dies without making a new will, he’ll die intestate — and he doesn’t want that to happen.”

If your client has children from a former marriage, Cardy says, he may want to provide for them by setting up a spousal trust in his will with income from it accruing to the second wife, while the capital goes to the children from the first family after her death.

Clough suggests considering a will that leaves some cash outright to the children of the first marriage, and putting some money in a family trust. “As much as possible, make sure there’s agreement between the spouses before a death on what’s going to happen,” she says.

The upside to late-life parenting, Roth notes, is the greater wisdom and perspective about what’s needed for a long-haul commitment that age often brings.

“He’s no longer building a career and working crazy hours,” Cardy says. “Now he can have a more balanced life.” IE