Deciding on Early Retirement? Don’t Overlook Your Support Obligations

Time to Retire - Clock

If you are on the brink of deciding whether to retire early, the recent Ontario case called Innes v. Innes is a reminder to make sure you take your spousal support obligations into account.

In that case, the couple had separated in 2001 after 26 years of marriage.  After what the judge called some “hard fought” litigation, the husband was ordered to pay $2,000 per month in spousal support to the wife, which he dutifully did until 2012.   But at that point, when he was aged 62, he decided to voluntarily retire from his job as a CEO of a not-for-profit corporation.  He applied to have the wife’s support cut off completely.

The court refused.  The husband’s decision to retire – thereby reducing his income from $200,000 to $70,000 – had been made as a “personal decision for lifestyle reasons”, and not because of any health-related concern.  He was living a very comfortable lifestyle:   He had remarried to a woman earning about $100,000 a year, as the court pointed out, “His budget includes things like $400 a month for meals out, $850 a month for vacation, and $200 a month for golf.”   Yet he had not set aside savings, made investments, or taken any steps to allow him to keep up his ongoing spousal support obligations to his first wife.

In fact, not only had the husband neglected those obligations completely, but in making his decision he also failed to give the wife any advance notice of his intent to have her support cut off.   In all the circumstances, this was simply not a material change that warranted letting the husband off the financial hook, the court found.

Thinking of making a change and retiring early?   If you currently pay support to a spouse, don’t assume that your support obligations will automatically change, too.   Make sure you get legal advice first.

To see the family law court’s full decision, see Innes v. Innes, 2013 ONSC 2254

Shulman Law Firm is a Toronto-area firm of experienced Family Lawyers who can provide practical advice and effective representation relating to the steps and processes involved in separating and getting divorced in Ontario.   Contact us to set up a free consultation.

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