Spousal Support and Retirement

With the rising cost of living in Metro Vancouver, planning for retirement has never been more difficult. Even for those who own their own home, costs associated with ownership have increased at a frightening pace for those planning on living on a fixed income. However, even the most well-prepared retiree is unlikely to have budgeted for a divorce as they near their golden years, and the capacity for someone to earn income at retirement age is greatly reduced. For many, a spousal support obligation into a payor’s mid-sixties could mean the difference between living comfortably and living in poverty. The question then becomes, in the unfortunate circumstance of retirement age separation or divorce, will the courts require spousal support to be paid?

While the answer to this questions is not a simple ‘yes’ or ‘no’, much can be gleaned from what courts hope to achieve with awards of spousal support. Ideally, the economic advantages, and disadvantages, of the marriage would be shared equally between the parties, as would the economic consequences of the breakdown of the marriage, and both parties would be economically independent and self-sufficient post-separation. With the limited earning capacity of someone nearing retirement age, their ability to pay spousal support on an ongoing basis can be very limited.

In practise, this means that judges are hesitant to impose spousal support, or impute income, in cases where a retired party has very limited income and/or job prospects. This is most evident where there are significant assets to be divided, and the parties are in relatively similar positions post-separation. Where parties are in unequal situations, a reapportionment of family property becomes a possibility. Both parties would be expected to manage their capital to meet their own needs.

Courts are also wary of “double dipping” into assets when dealing with a division of property & spousal support. If a pension is split as part of a division of assets, it is unlikely that either spouse will be able to claim for support on the income from that pension upon its commencement. From a review of the case law, there is an expectation that the parties manage their assets in an arrangement that allows them to derive income from them in a way that gives them each a degree of self-sufficiency. Importantly, any steps towards retirement must not be made without good reason as it may be seen as an attempt to avoid any future support obligations.

The preceding paragraphs were for information only and not to be construed as legal advice. If you have any questions about spousal support or separation at any age, please contact our office to speak to one of the lawyers at CWH Law Corporation: Carol W. Hickman Q.C., Laurence Scott Q.C., Rupinder Shoker, Rizwana Choudhry or Emily Raven.

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