Starting Over After A Grey Divorce – Don’t Forget to Plan for the Mortgage

Courtesy of Huffington Post

Below is a link form a great article in the Huffington post that discusses planning for grey divorce.  I am often surprised when I have clients and colleagues who have not heard the term.  It refers to divorce later in life and it is a growing portion of divorces in the country.  This article give some great tips.

From the article:

Keep your emotions in check

Ending a marriage with discipline and a certain amount of objectivity is important for keeping your finances in order. Unwinding a life of 20, 30 or 40 years together is emotional and takes time and patience. Try to frame things logically and engage the help of trusted experts like lawyers or financial advisors who can help you approach the situation in a practical way. Focus on the outcomes for each person rather than trying to “win at all costs.” In my experience, the emotional reaction of trying to win causes great hardship for the family involved and increases the legal costs associated with your divorce.

Understand your current financial picture

Ensure you know where you stand financially with all income, debts, assets and liabilities. When dividing family assets, consider the income you each require for the rest of your lives. Remember there will be a lifestyle adjustment as you transition to life on your own. You may need to make sacrifices such as taking fewer vacations or downsizing your home.

Revisit your estate plan

Change the designated beneficiaries on assets such as your RRSP, pension plan or insurance contracts. This is something that, in my experience, is often overlooked, resulting in assets going to an ex-spouse unintentionally. Revise your will and power of attorney documents as soon as possible.
Be cautious about your next chapter

Be wary of jumping in to a new relationship too quickly. Ensure you have given yourself time and space. Ensure that before you do pursue a new committed relationship, your own financial needs and assets are protected.

I love the advice here, but I am always surprised when these articles fail to address the complete financial picture.  As a lender who specializes in divorce mortgages, I see time and again the mortgage left as an afterthought.  In grey divorces, where the marital home is typically a large part of the marital assets and the divorcing parties may be on fixed incomes, the need think about housing is paramount.  There are even great options for seniors who are divorcing, such as reverse mortgages, to help stabilize cash flow and secure a more comfortable retirement post divorce, but to take advantage of these, a specialized lender needs to be brought in early.  This helps shape a better overall plan.

Original Article

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