5 Gray Divorce Problems and How to Solve Them
Critical Issues Facing Couples Divorcing in Their 50s and 60s
For couples ages 65 and older, the divorce rate is even higher, tripling since 1990.
What is a Gray Divorce?
“Gray Divorce” is a term used to describe divorces involving couples ages 50 and older. Typically, couples in this demographic have had long-lasting marriages of roughly 15 years or more.
Critical Issues in Gray Divorce
Separating Your Long-Time Shared Assets
When divorce becomes part of the equation in your later years, understanding its effect on your financial health is crucial. The end of a marriage, whether for older or younger couples, often touches off a scramble to protect your financial security.
Divorce requires both parties to disentangle their financial ties which encompass things such as savings and investment accounts, retirement plans, pensions, real estate and other properties obtained during the course of the marriage.
Additionally, issues such as spousal support (commonly referred to colloquially as alimony) may significantly effect your monthly cash flow and budget, depending on several statutory factors such as length of marriage, disparity in incomes, and ability to meet monthly needs.
Understanding Your Assets and Debts
Understanding your assets and debts may seem like an obvious starting point. However, even spouses who consider themselves financially knowledgeable may overlook significant properties.
These often come in the form of retirement or pension plans from prior employment that have not been touched in years.
To prepare yourself for a divorce, especially in a “Gray Divorce,” it is recommended that you begin collecting tax returns, pay stubs, retirement/pension accounts statements, insurance policies, at least 12 months of bank account statements, credit card statements, and loan statements just to name a few.
Also, it may be prudent to set up an appointment with your CPA, tax preparer, or financial planner to assist you in determining the scope of your financial holdings and liabilities.
Equalizing Financial Positions with Lifelong Spousal Support
In Washington State, long-term marriages that have lasted for 25 years or more, fall within a specific category in divorce cases, specifically with regards to how spousal support, or alimony, is awarded.
The primary case that addresses spousal support in long-term marriage divorces is Marriage of Rockwell.
In the last few years, the cases of Marriage of Kim and Kim; Marriage of Larson; and Marriage of Wright and Kim, have further cemented the court’s initial ruling on how support should be handled in these long-term marriage cases.
In short, the court is obligated to place you and your spouse in roughly equal financial positions, permanently. For couples near to or at retirement age, that typically translates to lifetime spousal support.
Income from employment, future compensation, etc. are and will remain subject to prospective division by the courts to ensure that both spouses earn roughly equal incomes.
This equalization approach also translates to how property is divided.
Courts have interpreted Rockwell as a basis for dividing all properties, including separate property (property obtained prior to the date of marriage and after the date of separation), if need be, to equalize the parties’ financial positions.
You or Your Ex-Wife Could Lose Insurance Coverage
The entry of final divorce decrees often signals the end of a spouse’s ability to continue to be covered under their former spouse’s insurance plan. In previous years, this has led to fears of being denied healthcare coverage as a significant number of adults in their 50s and 60s have pre-existing conditions.
The Affordable Care Act has alleviated some of these concerns as, under the law, individuals cannot be denied coverage for pre-existing conditions.
Depending on your age, you may be eligible for free Medicare Part A coverage based on your former spouse’s work record if you yourself do not have a steady work history to be eligible for Social Security benefits.
Estate Planning After Gray Divorce
A typical recommendation given to clients who have just finalized their divorce is reassessing and changing your estate plans. This often involves revisions and updates to your wills, specifically in who you designate as a beneficiary of your estate.
It is critical that you review your estate plan and make the necessary changes to ensure that the terms of your divorce decree do not conflict with your beneficiary designations to avoid any future legal disputes over your estate.
How to Survive Gray Divorce
Overcome the Obstacles of Gray Divorce
If the prospect of a divorce in your later years appears daunting, our attorneys can bring to bear their decades of experience to assist you in navigating these sometimes difficult and confusing financial issues.
Whether this is your first divorce or not, our attorneys are ready to help answer your questions.
You can schedule a 30-minute consultation at one of our 25 Pacific Northwest locations by filling out our short contact form below or by calling 1 (877) 866-7393.