“If late-life divorce were a disease, it would be an epidemic.”One out of three boomers will face older age unmarried, says Susan Brown, codirector of the National Center for Family & Marriage Research at Bowling Green State University in her new study The Gray Divorce Revolution. By the time people are in their 50’s and older, issues of custody and child support may no longer be relevant. Instead, those issues are replaced with other challenges. Older people have had time to accumulate assets, one or both may be retired, and there are long term health care issues. Many of those opting for gray divorces, however, fail to foresee its complications in today’s bleak economy. 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 interests involved when an older couples divorces. As always, information is power, so make a point to seek out experts for guidance.