Focus on Staying in the Black During a “Gray Divorce”

Game of chess

 

Older couples getting divorced have a lot more at stake financially and can’t afford to make mistakes.

SAN DIEGO, June 10, 2017 – The phenomenon of “gray divorce,” defined as divorces between spouses over age 50, is now a fact rather than a new trend. The rate of divorce in the older age group has doubled over the past 25 years according to the Pew Research Center. It is in part due to demographic trends as the Baby Boomer population is exceptionally large. It also has to do with this age group lacking the social stigma their parents and grandparents faced when getting divorced.

This age group is also living longer and living healthier into old age ever before. As someone turning 60 looks into the future, he or she often decides they want to spend the last two decades of their life pursuing happiness they don’t currently have in their marriage.

Divorce can provide a fresh start and improve your quality of life at any age when it is done as a thoughtful, planned decision. But it is not as easy to get divorced when you are older and when your marriage has lasted 20, 30, even 40 years. The main reason: your life is much more complicated from a financial standpoint.

After being married for so many years, the thought of leaving the marriage can be overwhelming. Many couples benefit from a long separation to consider their options. It can also provide an emotional cooling off period to help individuals look at the future in a more practical, less emotional way. It can sometimes prevent the couple going to war in court. It can also give adult children time to adjust to the new reality, since they may have their own concerns about finances such as inheritance that can cloud the situation.

If you decide to live apart for a while, it’s a wise idea to put a formal legal separation in place. If you don’t formally establish your circumstances under the law, your spouse might end up making medical or financial decisions for you should you become incapacitated due to illness. He or she may inherit your estate automatically upon your death. You can end up being liable for any of your spouse’s debts if he or she dies, even if you know nothing about them.

If you are old enough to be retirement age, you can’t divide retirement accounts unless you are legally divorced. Unless you inherit a death benefit, you will have no claim to retirement funds such as a pension or 401k. Gray divorces present the ideal conditions for a “post-nuptial” agreement, which you can create according to your specific personal needs to set rules in place governing income and debts.

Many older couples delay divorce due to health insurance coverage. In many cases, one spouse is dependent on the other spouse’s health insurance. They need to remain legally married until the dependent spouse is eligible for Medicare at age 65. The Affordable Care Act can sometimes offer an alternative, but with the legislation in political flux, these concerns remain real. Some large employers now restrict healthcare coverage for a separated spouse, precisely because of the rise in these cases.

Deciding what to do with the longtime marital home can be difficult. Sometimes, both spouses are ready to move on and downsize, and it’s not an issue. But if one spouse is emotionally connected to the home and doesn’t want to sell, or is pressured by adult children who don’t want to lose their childhood home, figuring out whether one spouse can buy the other out gets tricky. Taxes and cash assets come into play.

Without the safety net provided by a spouse, people involved in divorces over age 50 might need to rethink their retirement plans. They may realize they aren’t as ready and need to continue working – but it isn’t always an available option. Like in any divorce, maintaining a single household is less expensive than maintaining two.

Finally, what happens when your soon-to-be-ex spouse becomes chronically ill? Who cares for this spouse now, if he or she develops Parkinson’s disease for example?

Whatever you eventually decide, the process should always start with gathering all of your financial information and educating yourself about your retirement options. This may take quite a bit of time after decades of marriage and life. It is important to be thorough.

Sometimes the thought of detangling your financial life together is just too much for a couple to face. Instead, they end up living apart without ever getting a legal divorce. This is not a good alternative if you don’t put legal protections in place, especially if you “move on” emotionally. Be sure you contact a family law attorney for an honest discussion about your beneficiaries, healthcare directives and retirement. Arm yourself with sound advice so you can make the right decision you can live with for the rest of your life.

Myra Chack Fleischer serves as Lead Counsel for Fleischer & Ravreby in Carlsbad, California with a focus on divorce, property, custody and support, settlement agreements, mediation, asset division and family law appeals. Read more Legally Speaking in Communities Digital News. Follow Myra on Twitter: @LawyerMyra. Fleischer can be reached via Google +

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