The Gray Divorce – Part 2

The Gray Divorce - Part 2 by Susan Ingram

{4:12 minutes to read}

In my last blog, I wrote about the general phenomenon of the Gray Divorce. This trend is continuing to grow as adults in their 50s, 60s and older divorce their spouses, frequently after many years of marriage. There are unique issues that need to be addressed by a couple that decides to divorce at this later stage of life.

Certainly, at any age, divorce can have a devastating financial impact on a couple. But while younger people still have time in the future to rebuild their savings and assets, older divorced people do not. Thus, in a Gray Divorce, it is especially incumbent upon the parties to understand their financial needs and the ramifications of the decisions they make when dividing their assets.

Below, I’ve listed a few of the most important issues that need to be addressed:

Retirement Assets

For divorcing adults over age 60, retirement assets are frequently the largest assets of the marriage. These include 401Ks, IRAs and pension funds. In a long-term marriage, these assets will most likely be shared equally. To accomplish this, a legal document called a Qualified Domestic Relations Order (QDRO) will need to be prepared and included with the other divorce documents that are filed with the court.

The Marital Home

The marital home is also one of the largest assets of divorcing older adults, especially if, at this stage, the couple has fully paid off their mortgage. The couple needs to decide whether they will sell the house, or whether one will keep it and buy out the other. If one of them is very attached to the house and wants to buy out the other, that person needs to make sure the decision is realistic and will not end up crippling him or her financially.

Social Security Benefits

The rules for a stay-at-home or lower-earning spouse to receive Social Security benefits based upon the higher-earning spouse’s benefits are very complicated. The threshold requirement is that the couple must have been married for 10 years or more. Then there are a number of additional requirements that must also be met. It’s very important to get expert advice and determine the potential amount the lower-earning spouse may be entitled to.

Health Insurance

Any health insurance benefits a spouse receives from the other spouse’s health insurance ends upon divorce. Gray Divorce couples may decide to legally separate and sign their settlement agreement, but not proceed with the divorce filing itself until the non-covered spouse reaches the age of 65, at which time he or she is eligible for Medicare coverage.

Spousal Support

New York State and other states have guidelines for a spouse to receive support (also called maintenance) after the couple is divorced. Under the New York statute, the factors to be considered include:

  • The age and health of the parties;
  • The present or future earning capacity of the parties, including a history of limited participation in the workforce; and
  • The standard of living established during the marriage.

Especially in a Gray Divorce situation, the parties need to consider the ability for each to have sufficient financial means post-divorce.

The issues that arise in a Gray Divorce are multifaceted and can be complex. It’s important to include the advice of knowledgeable professionals. If you have any questions, please feel free to contact me.

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