Navigating Gray Divorce: Planning Eases Financial Complications of Divorce

When you marry someone, believing it will last a lifetime is natural. You love each other and hope those feelings will endure as long as you both live. However, the rising number of divorces among older adults—commonly referred to as "gray divorce"—suggests that this isn't always the case. In fact, the divorce rate for those aged 50 and older has doubled since the 1990s, according to a report from the Pew Research Center.

A study by the Department of Sociology at Bowling Green State University found that 36% of U.S. adults who divorced in 2019 were aged 50 or older. This is a significant increase from 1990 when only 8.7% of divorces occurred in this age group. Researchers attribute this dramatic rise to changing generational views on marriage, increased financial independence among women, and growing incompatibility as couples age.

If you find yourself at a crossroads, feeling that you can no longer continue with your spouse, divorce might be the best option for both of you, even though it's undeniably a difficult decision. The process is rarely easy, but preparing it's yourself emotionally, legally, and financially for what lies ahead is important. While the journey may be challenging, you might also feel a sense of relief and renewed freedom once the papers are signed and your marriage is officially dissolved.

"Gray divorce" comes with unique challenges. Financial security is a significant concern for many older adults, especially if retirement is on the horizon or already underway. Splitting assets, dividing retirement accounts, the cost of future long-term care, and possibly facing alimony payments can drastically alter your financial landscape.

It's crucial to seek professional advice to protect your financial future. Additionally, consider the emotional impact of starting over later in life. To navigate this transition, lean on support networks, such as friends, family, or a counselor.

Divorce after 50 is increasingly common, with nearly 1 in 4 divorces now occurring in this age group. While it may signal the end of one chapter, it can also mark the beginning of a new, fulfilling stage in life. By preparing yourself and taking the necessary steps, you can confidently face this change and move forward with your life.

Let's talk about how you can get ready for this event. 

Look Into Your State's Divorce Laws

First, you should know that not every state has the same divorce laws on the books. For instance, what qualifies as grounds for divorce in CT might look completely different in Nevada. You should contact an attorney who knows about divorce law in your state. They can answer all your questions.

You must find out whether you will have what qualifies as a fault or no-fault divorce if you live in a state where it matters. All 50 states have no-fault divorce. However, they all have different qualifications for meeting the state's standard for that term. 

If you're trying to do a no-fault divorce, some states want you to live apart from your spouse for six months before you can do it. If you're in one of these states, and you and your spouse want to do a no-fault divorce, one of you must move out of your primary place of residence. You must decide whether you'll do that, or they will.

Hire a Lawyer Who You Feel Certain Will Represent Your Best Interests

Presumably, you'll want to hire a lawyer. When you do, you must talk to them about whether they have the necessary experience in divorce law to represent you. It is helpful if the attorney has experience in "gray divorces" if you are older.

Also, you must see how you feel about the attorney you choose. Maybe you think they're qualified, but you simply don't like them. You might want to go with someone else if you don't have a rapport.

There's nothing more personal than a divorce, and you'll want to have someone representing you who you trust implicitly. 

Start Talking to Your Spouse About Alimony and Child Support

When it comes to "gray divorce," the financial implications can be significant, with alimony and, in some cases, even child support being key considerations.

Alimony

• Alimony is a common issue in gray divorces, particularly because these divorces often involve long-term marriages where one spouse may have been financially dependent on the other. The exact percentage of those dealing with alimony varies, but it is estimated that a significant portion of gray divorces—potentially around 30-40%—involve some form of spousal support​.

Child Support

• While child support is less common in gray divorces, it can still be a factor, especially if the couple has children who are still minors or are attending college. With people starting families later in life, it's not unusual for couples divorcing in their 50s or early 60s to still have dependent children. However, the exact percentage of gray divorces involving child support is much lower compared to younger divorcing couples.

For many, these financial obligations can drastically affect retirement plans and financial stability, making it essential to seek professional advice to navigate these complexities.

Start Speaking to Them About Custody, if Applicable

If you have kids, you must also start discussing custody with your spouse. In ideal situations, you can agree quickly and easily. However, that doesn't happen very often. 

It's far more likely you and your spouse will argue about who gets the kids and for how long. Maybe one of you will want full custodial rights. 

Perhaps you'll divide up the time you'll spend with the kids equally, with one of you hosting them one week and then the other the following week. Maybe one of you will have the children during the week and the other on the weekends. 

Older parents often have many work responsibilities and perhaps even health issues that may make it harder for them to be custodial parents.

Begin Discussing the Division of Your Possessions

It's important to start discussing the division of your possessions early in the divorce process. Just like negotiations over custody, alimony, or child support, reaching an amicable agreement on who gets what can be challenging.

If you and your spouse can agree on dividing items like artwork, kitchenware, lamps, or book collections without conflict, you're fortunate. However, these conversations often lead to disagreements over who should keep cherished items.

Your attorney can guide you through these often complex and emotional negotiations. While it may seem like the process will never end, and the discussions can be emotionally draining, with time and patience, you will eventually reach an agreement.

Long-Term Care and Gray Divorce Settlements

As gray divorce becomes more common, a growing number of divorce settlements are addressing the future need for long-term care. For couples divorcing after age 50, Long-Term Care Insurance has become a critical component of financial negotiations.

In these cases, one spouse may agree to pay for or purchase LTC Insurance for the other as part of the divorce agreement, ensuring that both parties are protected as they age. The protection of the LTC policy not only provides access to quality care but preserves the estate from the rising cost of long-term care services, protecting the evidential inheritance for adult children.

Including LTC Insurance in divorce settlements reflects the unique challenges older adults face. Unlike younger couples, who may have decades ahead to rebuild their finances, those divorcing in their 50s, 60s, or beyond must carefully consider how they will cover the costs associated with aging.

Long-term care, whether in the form of home care, assisted living, or nursing home care, can be prohibitively expensive, and without proper planning, it can quickly deplete retirement income and assets.

Incorporating an LTC policy into a divorce settlement offers several benefits. It provides both parties with peace of mind and financial security, knowing that their future care needs will be covered without draining their assets. It can also serve as a fair and equitable way to ensure that both parties are taken care of post-divorce, potentially reducing the need for ongoing alimony payments.

Aging, Divorce, and Avoiding Complications

Aging is challenging enough on its own, but when divorce is added to the equation, it can complicate matters significantly. The emotional and financial strains of navigating a gray divorce require careful planning and the guidance of a skilled attorney.

Proactively addressing issues like long-term care and ensuring that both spouses have equitable financial arrangements can make the process smoother and less burdensome for everyone involved.

A well-planned divorce settlement protects both spouses' interests. It provides stability for the entire family as they adjust to this new chapter in their lives. With thoughtful preparation and the right legal support, it's possible to transition through this difficult time with greater ease and fairness.