Gray divorce is a term that refers to divorce of couples that are 50 or older. Gray divorces have become increasingly common since the 1990s. A gray divorce could come from couples with a long-term marriage, a late-in-life first-time marriage, or who are in subsequent marriages. Each gray divorce, like all marriages and divorces, presents their own unique challenges when it comes to separation. It’s important to remember that all divorces, regardless of the ages of the parties, involve many different considerations, such as family, splitting assets, and determining who bears liabilities. Nevertheless, it is also important to acknowledge a gray divorce presents unique challenges that are not present when a younger couple divorces, such as retirement accounts, grown children and grandchildren, and less time to recoup assets after a divorce. This blog looks at three considerations to keep in mind in a gray divorce.
Financial Considerations
With a later-in-life divorce the context of what’s important has changed. There is less focus on issues regarding children and more of a focus on the division of property. With gray marriages, long and short term, financial assets may be a complicated portion of the divorce proceeding. Especially when compared to younger divorce there is less time for either party to adjust to a change in income, bounce back from the divorce, and recoup assets. If you are married without a pre or post nuptial agreement, all assets become intertwined, and they must be calculated and sorted to properly separate in the divorce process. This is especially true with retirement accounts, which are one of the most valuable assets in a gray divorce. The retirement accounts will need to be presently valued and valued for the purpose of how they will affect future earnings. Additionally, the survivor rights of financial and business accounts must be addressed in the separation.
The financial considerations of a gray divorce do not stop at retirement accounts. Any value or interest one party holds in a business must be calculated and divided. Any social security benefits also must be addressed. If you are on your spouse’s insurance, that insurance coverage generally will remain through the pendency of the divorce. After the divorce is finalized, each party will generally be responsible for maintaining their own insurance policies. Additionally, potential spousal maintenance is a consideration in a gray divorce where one spouse is mentally or physically incapacitated or where one spouse was not employed outside the home for a significant portion of the marriage. Additionally, while with many gray divorces any children are adults and support is not an issue, however there may be divorces where college expenses for adult children may be a necessary portion of the dissolution.
Inheritance and Estate Planning
With a gray divorce, issues arise regarding any estate or inheritance plans that have preciously been put into place. Many of which will need to be rewritten or otherwise reworked following the dissolution. First, both spouses will need to change any beneficiaries on any life insurance or any other important accounts that the spouse is on. While children are typically not a major focal point in gray divorces, they still should be considered especially as it pertains to estate planning. Marital assets generally include assets owned before or during the marriage. Without a prenuptial or postnuptial agreement this may create issues with plans for certain assets to be reserved for prior born children. Additionally, following a gray divorce there is less time to grow assets for an estate following a dissolution than with a younger marriage. This may have an adverse effect on the value of the estate generally. With estate planning it is generally important to remember to go back and revise any documents naming your spouse as a beneficiary after the divorce to make your new wishes for the disposition of your estate.
Personal and Family Considerations
With a gray divorce, especially when a long-term marriage ends, it is important to remember that this will have an effect on oneself, any adult children, and any grandchildren. At any age divorce can carry emotional challenges and it can take time to recover from the loss of a partner even in divorce. It can also be an adjustment from living with a partner to living alone. A divorce will also have an impact on family members. When addressing your divorce, it is best to have an open, honest, and sympathetic conversation. It is important to remember not to talk down about your spouse in front of your children, even if they are adults.
With the unique considerations and assets required in a gray divorce can make the process complex. As the process itself may be long and can become complicated, contacting an attorney familiar with gray or high asset divorces can help you navigate the process. Dixon & Moseley, P.C. attorneys practice throughout the State of Indiana and understand the significance of gray divorces and the complexities surrounding same. This blog post is written by Dixon & Moseley, P.C. advocates and is not intended as specific legal advice or a solicitation for services. It is an advertisement.