Special Issues of Gray Divorce

By February 20, 2020 Divorce, Gray Divorce

Believe it or not, the age group seeing the highest rise in the rate of divorce is the group of adults age 65 or older – Baby Boomers who decide to call it quits after often long marriages.  These so-called “gray divorces” have some unique challenges that should be addressed before signing any divorce papers, as this article explains.

It is not unusual for a couple married for 20 years or longer, who have raised children and find themselves with an empty nest, to suddenly confront relationship issues that had remained suppressed during the marriage.  As older people looking at what they want to do with their remaining vital years, starting over looks like a better option. The problem, aside from the emotional aspects of ending a long marriage, really become financial and existential.

When a couple has been married for such a long time, it is likely that all of the principal assets have been titled jointly or otherwise intermingled.  It is possible, if not common, for one spouse to have been the principal wage earner, which means that moving on after this marriage, the lesser earning spouse probably has fewer quality employment options.  What does this mean financially? Quite simply, the financial pot that has supported two people in anticipation of retiring together must be split and done so in a way that can sustain two separate lives and households.  All the good financial planning will be upended by the simple reality that for most gray divorces, the lifestyle during marriage cannot sustain two separate lives after marriage.

What do courts do in these situations?

With regard to property, the courts will operate under the assumption that all property obtained during the marriage is marital property to be divided equally.  The big assets – the house, the savings, the retirement accounts – have to be split. When the couple planned for retirement, they planned retiring together – a fixed income plan based around one residence and one income.  Now, the same couple has to live off the same sums, but for two separate homes and associated expenses. Simple math shows this is not sustainable without changes.

What changes can a couple make at this stage?

If the greater earning spouse is still employed, that spouse will have to pay the lesser earning spouse maintenance.  However, the amount and duration will be an issue because that spouse will be looking at retirement, or at least some natural reduction in income due to age.  At the same time, the other spouse needing maintenance will be asked to get a job, even though that spouse has been out of the workforce – so the wage prospects will be much lower.  Even if the couple sell the marital home and downsize, the future is one of less and more fixed income, a combination of some work, some retirement, some Social Security. Changes will be a necessity.

And what about health?  At this age, the risk of becoming ill goes up, as does the cost of longer-term care.  Do you have insurance coverage sufficient to deal with these problems? Any settlement should consider how to handle this contingency or else it leaves one or both spouses at risk of medical bankruptcy.

As you can see, gray divorce involves later in life changes that radically impact the immediate future, and without quality planning during the divorce, one or both spouses could find moving forward financially challenging at best.

If you have questions about gray divorce, contact us – we can help.