Divorce costs catch couples off guard as few sign prenups or plan for a split
Most Canadians marry without ever meeting a financial advisor, and many who later separate wish they had.
BMO's Real Financial Progress Index survey found that 84 percent of Canadians did not consult a financial advisor before getting married.
Among those who have since divorced or separated, 52 percent said they wished they had sought advice earlier.
That gap matters because leaving a marriage tends to cost more than people plan for.
Three in five (60 percent) divorced or separated Canadians told BMO the financial impact of ending their marriage was greater than expected.
The average divorce or separation ran to $4,863 before any asset losses or ongoing support payments, as per the index, while nearly one in five (17 percent) put the figure at $10,000 or more and 7 percent said the process exceeded $25,000.
Money also drags the process out.
According to BMO, 57 percent of divorced or separated Canadians said financial conflict prolonged their divorce and made it more stressful, with disagreements centring on child-related expenses (26 percent), the division of assets (25 percent), spousal support or alimony (22 percent), the division of debts (15 percent) and legal fees (12 percent).
Two thirds (66 percent) said they made significant lifestyle changes as a result, such as downsizing, switching jobs, cutting discretionary spending or working longer hours.
Legal fees topped the list of expenses divorcing Canadians found most surprising (46 percent), the survey found, followed by setting up a new household (21 percent), child-related costs (14 percent), spousal support (13 percent) and therapy (8 percent).
Few Canadians formalise financial terms ahead of time.
BMO reported that 77 percent do not have a marriage contract or prenuptial agreement, even though 52 percent of those who divorced or separated believe one would have made the split easier.
Among people without such an agreement, 67 percent did not think it was necessary, 10 percent felt uncomfortable raising it and another 10 percent did not know how to start.
Marriage contracts are often tied to the wealthy but "offer practical protection for everyone," said Carol Willes, director of estate planning at BMO Private Wealth.
She said a well-drafted agreement can avoid costly disputes, be updated at any point in a relationship, and clarify what happens on both divorce and the death of a spouse.
Anthony (Tony) Tintinalli, head of specialized sales at BMO, framed the findings as an argument for earlier planning.
"Financial planning should not end at 'I do'; it's also about building resilience for unforeseen events and unexpected costs," Tintinalli said.
The report notes Canadians are far more willing to budget for the celebration than the aftermath.
Respondents estimated a wedding at roughly $19,000 on average, according to BMO, spread across food and drinks ($4,884), the venue ($4,201), attire ($2,951), travel and accommodation ($2,834), photography ($1,648), decorations ($1,713) and entertainment ($1,603).
Even so, 63 percent said being married involved more financial planning than they had expected.
The costs extend to the guest list.
Attendees expected to spend about $1,530 per wedding on travel, clothing, food, gifts and other expenses, the survey found, and 40 percent of Canadians called attending weddings a major source of financial stress, rising to 49 percent among millennials.
