Retirement And Spousal Support
Very few things last forever. When it comes to family law, spousal support following a separation or divorce might be in place for a long time, but parties involved should be aware of the impact that a major event such as retirement can have on spousal support obligations. A recent decision from the Ontario Court of Appeal demonstrates this.
The settlement and original trial
The husband and wife separated in 2012 after being married for about 25 years. By the time the trial rolled around, their three children were all adults and child support was no longer an issue. The parties were set to go to trial in 2015 when they settled the outstanding issues before them, including spousal support. The spousal support agreement, which was non-term limited, stated the husband would pay the wife $1,650 per month, and that either party could seek a change in spousal support based on material change, whether the change was “forseen or foreseeable, unforeseen or unforeseeable.”
Things went smoothly for a few years until the husband announced that he intended to retire, which he did on December 31, 2017 when he was 57-years old, doing so with a full pension. The wife had retired from her public service position in May of the same year. She also retired with a full pension.
During the original trial, the judge found that the husband’s retirement constituted a material change in circumstances. After then considering the means and needs of the parties, the judge determined that spousal support was no longer necessary.
The wife appealed the trial judge’s decision, arguing that the husband’s retirement was early, voluntary, and unreasonable. Therefore, she said, it could not constitute a material change. The wife also took the position that the original consent order made no mention of retirement, which means it was exempt from consideration of material change. In fact, the wife said the husband had originally wanted to include retirement as something which would trigger a conclusion on spousal support, but that it never made it into the final agreement.
The court of appeal agreed with the trial judge, though, concluding that with the facts presented to her, the judge considered the evidence and applied the correct law in finding that retirement, and the drop in income that comes with it, constituted a material change.
The wife also argued that the trial judge erred in terminating support, and that collecting spousal support for just five years was insufficient compensation for her income disadvantages that she experienced after staying home with their children and working part-time. However, the court found no error in the trial judge’s consideration of the parties’ assets and incomes, The trial judge noted that the wife had found a new partner and that the financial benefits of doing so should be taken into account.
Ultimately, the decision is a good reminder that even if an agreement on spousal support does not call out retirement as an event which would trigger a stoppage of payment obligations, it still may serve as such.
Contact NULaw as soon as possible if you are contemplating a separation, or have already begun the process. We are dedicated to pursuing your interests and getting exceptional results. Let us focus on your rights and negotiate the best possible outcome for you while you focus on rebuilding and moving on. Contact us online or at 416-481-5604 to book a consultation.