Mortgage 101 – Financial Literacy in Marriage

Clinton Wilkins and Todd Veinotte, along with family law lawyer Leigh Davis, explore the complexities of separation and divorce. They discuss the importance of cohabitation agreements and prenuptial agreements, noting that many couples avoid them due to romanticism.

Todd Veinotte
All right. Welcome back to Mortgage 101. Your Guide home ownership with Clinton Wilkins, our mortgage guru, and myself, Todd Veinotte, and we have a nice guest in studio today, Clinton.

Clinton Wilkins
We do have a nice guest. February is the month of love. We talk about love your home and all these good things. In the past, we’ve been doing this show what – seven years? We’ve had conversations about improving your home. We’ve had Realtors on about selling a home and buying a home that you do love. But we have a different angle this year, don’t we?

Todd Veinotte
Yes, we do. And I think it’s nice to mix it up from time.

Clinton Wilkins
I’m excited and the guest that we have is Leigh Davis. She is a family law lawyer at MDW here in Halifax, and we have a lot of questions for Leigh, which I’m excited about. We’ve had lawyers on in the past, but we’ve always wanted to have a family law lawyer. And let me tell you, I don’t know from her perspective if it’s busy, but I’m certainly seeing a lot of action in that family law category. We have almost 20,000 clients, something’s happening all the time in that perspective. And we’re gonna ask her a lot of questions. I’m curious to know about cohabitation agreements and curious to know about the Matrimonial Property Act. Sometimes, people will take a deed and how that could potentially impact things. Where do you wanna start? I mean, you go right ahead, Todd, we’ve all been through breakdowns.

Initial Discussion on Legal Advice and Separation Process

Todd Veinotte
Let’s start when you have people in front of you, couples, whatever dynamic that might be. Do you advise them what if things go wrong? Can you have that conversation with them, or do you not have that conversation?

Clinton Wilkins
Do you have to do a disclosure upfront, so we’ll pass it over to you.

Leigh Davis
So first of all, thanks for having me here. I appreciate being able to be here with you guys. Everything we talk about today is gonna be more in the way of legal information or general information rather than legal advice. Every family has its own particular set of circumstances, so it’s not a one-size-fits-all-all, but we’ll try to talk through some of those issues. When I’m seeing somebody who’s separating, or coming to me and looking for some legal advice. I wouldn’t be seeing the couple together. It’s just one of them that is gonna come to me to get some advice about either thinking about separating or how you might be able to deal with it, separation has happened either by your choice or maybe a little less voluntary on your part. That happens too. So we talk through what the process will be. Ideally, you create a roadmap for folks as they’re going through the process of separation. Some things need to happen right out of the gate in terms of how is money going to move. What’s going to happen with kids, things like that. And then, there’s the overall process, the legal process. How do you get from point A to point B, if point B is getting divorced, and what road do you need to be on, and what needs to happen along the way? So we’re helping people navigate through those issues.

Clinton Wilkins
I think sometimes the issues can be avoided upfront. I think when we’re talking about an operation, agreement or a prenup, why don’t more people enter into that agreement? It seems so much easier to talk about business when things are good. Why do people not do this?

Leigh Davis
People go in thinking, of course, everything’s going to work out. It’s never going to happen to me. I mean, the statistics say something else, of course, and people have their own experience with it. Their families, they’ve had it. As children, their parents have separated, or family members have separated. So it’s not like they don’t know that that happens. But when people are in love and they’re getting married, they do feel it’s somebody else that’s gonna happen.

Todd Veinotte
Is there some level of fiduciary responsibility on your behalf to broach it, to say that the order to offer that, to say, look, this is something that you might want to consider, or is that just something that you do not have a fiduciary responsibility to do?

Leigh Davis
I wouldn’t say I have a fiduciary responsibility for sure. I usually do not see people when they’re getting married, when they’re at the front end, when they’re happy. People usually come to see me in crisis, right? But for those folks who do come in early, then we can talk through what might be necessary or what might be helpful to put an agreement in place so that you can avoid some of those problems later like you said. Or if I’m dealing with people who are going through a separation or divorce, reminding them that if they are going to revisit getting married again in the future, that might be something that they want to think about.

Negotiation and Mediation in Family Law

Todd Veinotte
So it must be tough emotionally, though. How do you how do you detach yourself from that?

Leigh Davis
Emotionally, it’s not for everybody, for sure. So it takes a certain kind of person, I think, to have a long career in family law. You have to be able to understand that the problems that these folks are facing aren’t your problems. You have to separate yourself a bit from that. I, ideally, am trying to help navigate somebody through that experience, through that situation that they’re going through. So, when you look at it from that perspective, that you’ll help them get into a better place than they were when they came to see you, then it satisfying, gratifying, and it helps through some of those tougher times.

Todd Veinotte
Do you find that in the beginning, when people are separating, oftentimes they want to be the bigger person? Do you feel as though maybe guilt is at play and they start to offer saying you can keep this and you can keep that.

Leigh Davis
Sometimes, those words can come back to bite you, certainly when we’re talking about negotiating and things like that. You use whatever you can to help get your client a little further ahead, of course. So sometimes if somebody has done something that’s led up to the breakup, or if there’s some guilt associated with the choices that that person has made you don’t want to capitalize on it too much because you still want an agreement that can be binding and enforceable, but sometimes that can give you a little bit of an edge in the negotiations, as I said, use what you can, as long as you’re doing it. Everybody’s eyes are wide open. Everybody’s getting good advice.

Todd Veinotte
So generally, you deal with people separating, and that makes sense, right?

Leigh Davis
As a lawyer, I do. I also have a family mediation practice, and in that case, I’m not giving people legal advice, but I’m helping. In that case, I would see the couple that’s separating or has separated, and they have some stuff to work through. And in that case, I will meet with both people and facilitate negotiation, facilitate a discussion, to see if you can make some progress outside of the court process. And then they would get their own, independent legal advice, separate and apart from me. So in that case, I would meet with both individuals. But as a lawyer, just meeting with one person is in line with my professional response.

Todd Veinotte
Do you represent these people in court as well? I would think from time to time it’s tough.

Clinton Wilkins
We’re not just talking about finances here. I know that’s what our show is, but there are so many other aspects to family law when we’re talking about parenting plans, and there can be other wide range of topics that are being impacted by a separation or divorce.

Leigh Davis
And they’re so interconnected because when you’re talking about parenting, then that might inform who is going to live in the house, whether the house is going to be kept if another house needs to be purchased, do they need to be in the same neighbourhood, that kind of thing. If you’re going to refinance the house, banks want to know if you’re going to get support, if you’re going to have to pay support, of course. So it’s all sort of connected dots that you have to put together to make it all make sense.

Clinton Wilkins
Sometimes people don’t even get to a Separation Agreement. I see so many times where there’s a court order involved, and people just agree without getting in front of the court. And I mean, I see so in so many situations, and sometimes it’s just assets. They’re blowing through so much of their money that it’s just easier. And I think sometimes people just can’t see the forest from the trees, or whatever the saying is.

Financial and Emotional Costs of Separation

Todd Veinotte
How expensive can be? It may vary, but I mean people get into spending tens of thousands of dollars on trying to unravel, what they did, right?

Leigh Davis
Time is money, right? So if you’re coming into it and you already kind of know how things might shake out, you just want to get some advice and it’s very amicable and cooperative then your costs are going to be a lot lower. If you’re talking about going to court, you’re definitely in the tens of thousands of dollars, even for things that are relatively narrow in terms of the issues, it adds up and so, and there’s a lot that goes up to it before you even end up before a judge. That’s gonna take a lot of time and a lot of expense for people. You always have to do that cost benefit. Yeah, that $5,000 might seem important when you’re looking at it compared to the other person getting it, but what’s it gonna cost you to get that $5,000 and so always just doing the cost-benefit fit, and it’s also costing you in other ways. Is costing you emotionally and your energy and all the rest of that.

Todd Veinotte
It adds up to what type of timeframe are we talking and again, this would vary, I’m sure greatly from instance to instance. But from start to finish, are we talking generally, months, years? What type of timeline?

Leigh Davis
If people are very amicable and cooperative after they separate, you can usually get a Separation Agreement within the first couple of months. Some special circumstances where it might happen sooner, but generally speaking, it takes a year from the time you separate to be able to process the divorce. But for most people, it usually takes at least six or eight months to get over the initial shock of the separation. Well, not everybody’s shocked, but a lot of times it’s more of a shock to one person than the other.

Clinton Wilkins
A person might have their stuff packed already, or sometimes it’s a slow death.

Leigh Davis
Sometimes everybody knows that this is the way it’s going, but other times it’s a surprise. So it would be very unusual for everything to be resolved in an agreement in less than a couple of months because there’s stuff you have to do. You have to get over the shock of that, and then you have to start to sort some things, get some advice, make sure you share the information and make a plan so at least a couple of months. I have some cases at the time end where you’re talking about a couple of years before it’s finalized.

Impact of Finances on Separation

Clinton Wilkins
I’ve seen someone who has dragged on and dragged on. I’ve clients that come in for pre-approval, or maybe it’s a refinance, and like, I’m gonna get this done quick, and it takes four months, then we’d get it reapproved, and it’s eight months, and then it turns into a year. This does happen quite often. So many times have seen this matrimonial breakdown that happens because of finances. I think that’s just a huge, huge stressor for people overall and people don’t talk about their finances. They have no idea what’s going on with the other spouse. I know we’ve talked about this on our show before, but people operate almost in a silo. They have their credit they have their bank account, and sometimes the only thing that they have together, maybe, is the matrimonial home and maybe some kids, depending on what the situation is. But, I always recommend opening your mail and maybe it’s like Wine Wednesday or something and talking to your spouse about what’s going on. Some of these issues can be solved just by having a conversation.

Leigh Davis
It’s not unusual at all for somebody to come and see me, and they have no idea what they even own. They don’t know what their bank accounts are, what the numbers are, what their investments are and people just fall into roles in relationships. They do it with everything but money. Money, especially one person looks after the money. One person may be better with paying bills or organizing or budgeting or whatever it might be, and the other person often defers to that person. And fine, if everything’s going well, but when it’s not, it can leave you in kind of a deficit situation in terms of your knowledge if you get to the end of it and you need to be.

Clinton Wilkins
I’ve seen these people in my office where they’ve never made a decision about mortgage lending in my entire life. I’ve had several mortgages and several homes, but I was just told by the other person what to do and where and where to do it. The same thing kind of happened with my parents. My mom passed away. My dad in 40 years, I don’t think paid a bill. He worked and my mom worked too, but he worked. He made the money. He looked after the investments but didn’t pay any of those household bills. So guess what? It’s the same type of idea. When you go through a separation, that’s it. We’re almost out of time here. But I’m very curious to know, and we had so many people during COVID, not as many separations, so I’d be interested to hear some of the stats when we come back, about where things are at in 2025 compared to the last couple of years it sounds like a good segue.

Todd Veinotte
I think that’s a great segue, indeed, nicely done. Mortgage 101 your guide to home ownership. We’ll be right back.