It’s no secret that many marriages end in divorce—and divorce can have a dramatic effect on financial goals, priorities and security. Let’s look at the impact of divorce on 41-year-old Edward’s financial situation.
Edward is a full-time public school teacher in Vancouver with a defined benefit pension plan but a modest salary. He also worked part-time as communications director for his ex-wife Gwen’s biotech manufacturing business and, in the divorce settlement, was awarded a lump sum equivalent to 10% of that company’s $20 million appraised value. This has allowed him to pay off an $800,000 mortgage on the $1.41 million family home and remain there, providing stability for the couple’s children for whom he had been the primary caregiver. Edward and Gwen agreed on shared custody.
However, with limited income potential in the future and the high expenses that accompany divorce and follow it as one household becomes two, he is looking for financial planning strategies that will enable him to make the most of his assets, help his children succeed, and achieve his retirement goals.