Going through divorce can be an emotional roller coaster. During this time, many individuals may feel overwhelmed by numerous powerful feelings, including anger, betrayal and shock. These emotions often cloud one’s judgement, especially as it relates to their current financial situation. Your divorce may have complex issues that requires advice outside of the legal profession.

As a Portfolio Manager with a focus on high net worth individuals who have recently transitioned through a liquidity event, I have helped a number of clients achieve financial independence. In my experience, the most common financial mistakes people make in divorce fall into three main areas: being unprepared, being uninformed and having a short-term horizon or perspective.

Being prepared seems like an impossible task when it comes to divorce. Many individuals are shocked and surprised when the relationship they have built for many years, if not decades, is suddenly over. Spending time preparing and organizing your finances generally results in a less costly settlement process and better outcome for everyone involved. It is important to gather all the relevant documents relating to your cash flow, income and net worth, including bank and investment account statements, notices of assessment, tax returns, credit card bills and other household financial notices. These documents will help your divorce team appreciate the standard of living you maintained during the marriage. Understanding what your spending habits were as a couple will help establish what amount of principal you will require to maintain your lifestyle after the dissolution of your marriage. The amount of spousal support which will be paid depends on the needs, income and resources of each partner. Both parties should develop a financial roadmap that serves as a benchmark to evaluate various settlement scenarios. This in turn will help determine the adequacy of the options for future financial security. It is important to remember that the financial needs of a single individual are different than those of a married couple. You need to be prepared for the fact that you may not be able to completely maintain your marital lifestyle after divorce, especially if you are not still in your “asset gathering” years.

Being uninformed is the second mistake that divorcees routinely make. Ensure you spend time understanding what you own, what your spouse earns and what you are entitled to. Many of the items you acquire while married or living together often become joint assets, especially if you have been together for a long time. Small and sentimental articles also matter, even if they are not expensive. The provinces and territories are responsible for laws that set out the rules for dividing property when a couple divorces or becomes separated. These laws may vary in different parts of Canada. The term ‘property’ may include a variety of items such as: your home, the contents of your home, additional real estate, pensions, RRSPs and RRIFs, CPP credits etc. Again, it is essential to have a firm understanding of all family finances such as net family income, spending rates and savings.

The final mistake that often occurs during divorce is that one spouse wants the whole process finalized as quickly as possible, and does not think about the long-term effects of their decisions. It is important to take the time to establish financial goals and objectives and work with a financial professional to create a strategic wealth plan to meet those objectives. Understanding the implications of the division of your assets is essential to achieving long-term financial success.

There is no doubt that divorce is challenging. If you can prepare, organize and focus on your long-term goals, you will be setting yourself up for a successful independent financial future.

For further information on how to take charge of your financial future, please don’t hesitate to contact me at 416.867.8272 or by email at

Sarah Bull

Partner and Portfolio Manager

KJ Harrison

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