Yet another magazine is reporting on the rising phenomenon of “gray divorces,” or divorce among couples who are aged 50 or older. There are a few special concerns you should be aware of when divorcing after age 50.
Gray Divorces
First, some facts. Among the baby boom generation, the divorce rate has doubled since the 1990s. In 2015, up to 10 out of every 1,000 people over the age of 50 divorced, according to a report from the Pew Research Center.
Though these rates are still lower than those of younger generations, it is the increase in the number of divorces, not the actual divorce rate, that is generating interest among family law attorneys and experts.
Reasons vary. “Life is short, and once you sort of are aging and start to see a limited number of years left on your life, you start to put your own happiness first and do the things that you would want to do.”
I’ve written about gray divorces before. Like the emotional aspects, the legal nuances of gray divorce can be different than what younger couples might encounter when dealing with a split. Chief among those nuances are financial considerations, which can present unique challenges for spouses who are at or nearing retirement.
Florida Gray Divorces
When couples choose to divorce in their 30s or 40s, they still have time to recover financially, because adults at that age have several years, if not decades, left in their careers.
But when divorce occurs when a couple is in their 50s or later, the so-called “gray divorce”, careers may either be coming to a close or are completed, and spouses are often living on fixed incomes provided through Social Security or retirement benefits.
Here are some things to consider:
Valuing the Marital Estate – By the time a couple enters the golden years, they may have gold to divide, including businesses, retirement funds, and vacation homes. Valuing these assets can be difficult. The value of a business may not be apparent from balance sheets, and the sale or transfer of assets may have tax consequences. As a result, a financial advisor may be an important component in the divorce.
Medical Care – Health insurance is often tied to the employment of one spouse. With aging comes diminishing health, and declining cognitive ability. Courts may need to intervene if one party has dwindling capacity to handle their own affairs.
Long-Term Arrangements – Legal arrangements, such as wills and trusts, need to be reviewed to make sure they reflect post-divorce wishes. The same is true for long-term care, such as medical directives, living wills and trusts.
Retirement Plans – After 20 years of marriage, retirement plans can be substantial . . . and complex. Retirement plans vary in kind, and they all have different restrictions, tax consequences, distribution and vesting rules.
Lifestyle adjustment – Younger couples have time to re-accumulate wealth after divorce, but in Gray Divorces, the spouses have less time to re-establish themselves financially. One or both may be close to or in retirement, and face living on half of what they earmarked for retirement.
There are special concerns involved in a gray divorce, or when an older couple divorces. As always, information is power, so make a point to seek out experts for guidance.
Though a couple may have carefully planned for their futures when they were married, they return to the drawing board when it comes to estate planning after a divorce.
Most gray divorces involve marriages that have lasted for several decades, which makes it difficult to disentangle the spouses from each other. However, couples who divorce after many years together should receive a close-to-even split of assets, legally putting each spouse on an equal playing field for the future.
The Indiana Lawyer article is here.