I am dealing with divorce and need financial guidance
Divorce is a life change with far-reaching consequences. If a divorce is a challenge you are facing, you have important decisions to make.
Divorce is one of life’s most stressful events. Unfortunately much of that stress is likely to be related to your financial situation. A divorce can have a significant impact on your finances now and in the future. Your net worth can change in an instant, and your plans can change forever.
How we can help
Your BMO Nesbitt Burns Investment Advisor can help you make the transition that divorce requires. By working with you during and after the divorce process, your Investment Advisor will help you assess your financial situation and begin your new financial future.
Coming to grips with the financial considerations of separation and divorce before they legally take place can ease the process of breaking up a financial union. Analyzing the possible consequences of a divorce and coming to a reasonable settlement can reduce cost, distress and disruption. Financial guidance from a professional who knows you and your financial situation can help ensure a favourable division of assets.
Your BMO Nesbitt Burns Investment Advisor can also help you deal with the additional financial responsibilities that divorce can create. You could require funds to help your children with child support payments or to meet additional child-rearing expenses. You might have to deal with tax issues when assets are sold or transferred. Your pension and insurance arrangements could change.
Just as critical, your Investment Advisor will help keep your financial life on track to meeting your goals. You are likely to need a new financial plan and a new investment strategy. Your Investment Advisor will take the time to carefully consider your changing situation and help you build a strategy that’s right for your new circumstances and goals.
Advice in action: Angelo and Francine
Angelo and Francine have agreed to divorce. Over the course of a 20-year marriage, the two 55-year-olds built a family, a home and assets that range from RRSPs to a jointly owned rental property. They’re both committed to parting on amicable terms and splitting assets fairly, and are currently working out a separation agreement.
There are notable differences in their financial lives. Angelo and Francine both work, although Francine took some time away from her job to raise their daughter, Caitlyn, who is developmentally challenged. Angelo is a teacher, while Francine earns considerably more income in her executive position in a management consulting company. However, Angelo’s RRSPs are worth more, helped by contributions made from an inheritance from his mother. The couple set up a Registered Disability Savings Plan (RDSP) for Caitlyn soon after these plans were introduced by the federal government, and want to make sure there will be adequate income to cover her care even after they’re gone.
A BMO Nesbitt Burns Investment Advisor can get to work right away on unravelling the potential complexities of the divorce. Reviewing Angelo’s and Francine’s finances and exploring fair ways of dividing their assets is best done before legal agreements are in place, particularly because the couple are splitting on amicable terms. An Investment Advisor can help explore how the couple’s uneven income levels and financial differences might affect division of assets, and recommend a tax-effective plan for transfer — and if necessary — sale of assets as part of a divorce agreement. Their Investment Advisor can also help review the long-term financial arrangements Angelo and Francine have made for their daughter, including taking steps to maximize the generous government grants available in an RDSP, and explore the benefits of setting up a trust on her behalf as well.