Spousal Support After Retirement (BC, Surrey) - Zukerman Law

Spousal Support After Retirement (BC, Surrey)

Spousal support, also known as alimony, is a financial arrangement established during a divorce that provides ongoing payments from one spouse to the other. It’s intended to help the lower-earning spouse maintain a similar standard of living after the divorce as they did during the marriage. But what happens when retirement enters the picture? Does spousal support automatically end when one or both partners retire?
The reality is, there’s no simple answer. Retirement can introduce a significant change in financial circumstances for both spouses. This blog post will explore the complexities of spousal support after retirement, including the factors courts consider when modifying these obligations. We will also discuss how the Professional legal team at Zukerman Law Group can help you navigate this situation.

Factors Influencing Spousal Support in Retirement

Factors Influencing Spousal Support in Retirement

Let’s delve deeper into the factors that influence spousal support in retirement:

Duration of the Marriage

The length of the marriage often plays a significant role in determining spousal support. Generally, longer marriages may result in more substantial support obligations, as they typically involve a deeper financial intertwining of the spouses’ lives and resources.
Courts may consider a marriage of significant duration (e.g., 10 years or more) as grounds for longer-term or permanent spousal support.

Financial Situation of Each Spouse at Retirement

The financial circumstances of each spouse upon retirement are crucial. Retirement can significantly alter the income and assets available to each party. For instance, if one spouse has a robust retirement plan or pension while the other does not, this disparity could impact the determination of spousal support post-retirement.
Assessing each spouse’s retirement savings, investments, and sources of income is essential in establishing fair support arrangements.

Contributions During the Marriage (Financial and Non-Financial)

Contributions made by each spouse during the marriage, both financially and non-financially, are taken into account. Financial contributions include income earned, assets acquired, and debts incurred during the marriage.
Non-financial contributions encompass homemaking, childcare, support for a spouse’s career or education, and other intangible contributions to the marital partnership. Courts consider these contributions when determining the extent of spousal support, especially in retirement when the division of assets and income becomes critical.

Age and Health of Both Spouses

The age and health of each spouse at the time of retirement are factors that influence spousal support. Older spouses who retire may have limited opportunities to re-enter the workforce or acquire new skills, impacting their ability to become self-supporting.
Additionally, health considerations, such as chronic illnesses or disabilities, can affect a spouse’s capacity to generate income or manage living expenses independently. Courts may adjust spousal support based on these factors to ensure that each spouse’s financial needs are adequately addressed in retirement.

Division of Assets

The division of marital assets during the divorce settlement can also influence spousal support after retirement. This includes assets like pensions, which may provide ongoing income for one spouse.
These factors collectively contribute to the complexity of spousal support arrangements in retirement. Understanding how each element impacts support calculations and negotiations is crucial for achieving fair and equitable outcomes for both parties involved. Consulting with legal professionals specializing in family law, such as Zukerman Law Group, can provide valuable insights and guidance tailored to individual circumstances.

Does Spousal Support End in Retirement?

Does Spousal Support End in Retirement?

Spousal support is not automatically terminated or reduced when a spouse retires. The duration of support depends on the situation, as the purpose of spousal support is to relieve economic hardship caused by marriage or breakdown.
However, on retirement, a spouse can apply to vary their support order if their ability to pay support is compromised, the needs of the receiving support have changed, or there are concerns of double recovery. The decision of whether to vary support depends on whether the applicant can demonstrate a material change in circumstances.

What is a Material Change in Circumstances?

What is a Material Change in Circumstances?

A material change in circumstances refers to a substantial, ongoing change that was not foreseen or could not have been reasonably contemplated, that, if known at the time, would likely have resulted in a different order.
In the case of a spouse’s retirement, the court will consider whether the event that has since occurred, such as income reduction due to retirement, was taken into account in the previous order.
Courts are generally reluctant to vary a spousal support order following retirement in cases where the payor is retiring early, has paid less than the length of the marriage, or is retiring to avoid paying spousal support.
This is because the test for a material change is not whether the change was or was not foreseeable by the parties at the time of the previous order.

When Will a Retirement Be Described as Early?

When Will a Retirement Be Described as Early?

It is not always obvious in the courts. On the other hand, in the absence of health problems or other exceptional circumstances, an “early” retirement is defined as either a reduced pension or a full or unreduced pension taken before the age of 65.
Early retirement will be accepted where justified by health issues, economic uncertainty, or lay-offs where there is not a reasonable prospect of finding new employment.
In some cases, the courts found that the retirement decision was reasonable in and of itself; however, the early retiree is then awarded an income from a part-time job.
Another problem that might occur in retirement situations is the phenomenon known as “double recovery,” or “double dipping.”

What is Double Recovery?

What is Double Recovery?

The concept of “double recovery” refers to the situation where a pension, once equalized and divided as property, is considered income in calculating spousal support payments. After a marriage’s dissolution, the family net property is divided among spouses, with each receiving assets and an equalization payment made.
However, if a spouse later shares in the pension income as spousal support, they can be considered to be recovering twice from the pension, or “double recovery.”
It is generally unfair to allow the spouse receiving spousal support to reap the benefits of the pension both as an asset and as a source of income. To avoid double recovery, courts should focus on the portion of the payor’s income and assets that have not been part of the equalization or division of matrimonial assets when the payee spouse’s continuing need for support is shown.
Double recovery may be permitted in spousal support orders or agreements due to need, where the payor spouse has the ability to pay and the payee spouse has made a reasonable effort to use the equalized assets.

Conclusion

Spousal support and retirement can be a complex legal issue. The factors courts consider when modifying support obligations can be nuanced, and navigating the legal process alone can be daunting. This is where Zukerman Law Group can be your trusted advocate.
Zukerman Law Group’s Professional legal team has a proven track record of success in handling spousal support cases, including those involving retirement. We understand the intricacies of the law and can effectively represent you in court, ensuring your rights and interests are protected.
If you have questions or concerns about spousal support and retirement, don’t hesitate to contact Zukerman Law Group for a consultation. We can provide personalized guidance and help you achieve a fair and favorable outcome.

FAQs

How long does spousal support last in Canada?

Spousal support often lasts for six months to a year for each year you were married or cohabitate. However, spousal help may not terminate when you divorce if you were married for a long time and are older. The end date would be decided later, maybe after you (usually the payor) retire.

What is non-compensatory spousal support?

Non-Compensatory spousal support is a form of financial assistance provided to a spouse based on their economic interdependency during their marriage.

author

Stuart Zukerman

Stuart Zukerman, a graduate of the University of British Columbia, has over 32 years of experience in litigation with a focus on Family Law, Personal Injury, Wrongful Dismissal claims, and Collaborative Divorce & Mediation. He has extensive trial experience in divorce, child custody, spousal support, asset division, and ICBC injury claims. As an accredited Family Law Mediator, he helps resolve disputes without court intervention. Stuart has also authored papers on family law and lectured at CLE courses.