Although overall divorce rates are at a 40-year low, the number of people divorcing after age 50 has doubled since 1990, according to the National Center for Health Statistics and the U.S. Census Bureau. There’s even a term for it now: "gray divorce." Consider these five issues if you’re over 50 and are contemplating or are in the midst of a gray divorce.
Emotions of Divorcing
Gray divorces often involve dissolving a tie that lasted decades—perhaps even most or all of your adult life. When you consider the potential changes in your life stemming from a divorce over 50, evaluate whether you are angry, scared, invigorated, or perhaps a combination of these states.
Understanding and working through these emotions, perhaps with the help of a trained therapist, will allow you to make smart decisions about how to proceed with the divorce and exit your marriage with your well-being intact.
Legal Process of Gray Divorce
How you decide to divorce is perhaps the most important decision you will make. Divorce is a legal process and therefore necessitates lawyerly input at some stage of the proceedings. However, many avenues are available for seeking legal advice; you don't necessarily have to go to battle. Couples commonly choose from one of three main types of divorce proceedings:
- Traditional divorce: With this approach, couples hire lawyers and head to court without prior mediation. For this reason, the costs of this type of divorce are generally higher than they are for a mediated or collaborative divorce. Because couples may resort to this option when they can't agree on issues on their own, proceedings can become acrimonious, which can increase legal fees and stress.
- Mediation: Can you work out an amicable divorce? If so, consider this Alternate Dispute Resolution (ADR) approach where you and your spouse work with a mediator to resolve issues, put together a settlement, and then go to court to get the settlement approved. A nonacrimonious process may save you money and stress during your divorce.
- Collaborative divorce: Choosing this ADR means that you and your spouse will both enlist attorneys and, if needed, other professionals, but will engage in four-way sessions to resolve issues in an attempt to agree to an out-of-court settlement. Consider this a middle-of-the-road option between a traditional and mediated divorce.
Choosing a mediated or collaborative divorce can save money and stress during a gray divorce, but it assumes a certain level of good faith on the part of both spouses. An irreparable relationship with a spouse may demand the need for a traditional divorce.
You could be working with these experts for anywhere from months to over a year to hash out sensitive issues. Contested divorces where you can't agree on issues often come with conflicts that require experience and sensitivity to navigate, so it's important to hire a professional who is both trained in the type of divorce proceedings you choose and who fits into your budget.
- Attorneys: These professionals are relied upon in traditional and collaborative divorce proceedings. If you opt for a traditional divorce over 50, consider a family law attorney. If you opt for a collaborative divorce, choose a collaborative lawyer who is specifically trained in proceedings of this nature.
- Mediators: Family law mediators can generally help guide you through the mediation process.
- Attorney-mediators: These mediators with legal credentials won't take sides and can be used to answer initial questions about a divorce after 50. However, each spouse should hire attorneys when it's time to take a specific legal action on his or her behalf.
- Other professionals: As part of a collaborative divorce, you may need to enlist other experts, including accountants, financial planners, or Certified Divorce Financial Analysts, appraisers, and therapists.
Taking the time to understand your legal needs and the complexities of your divorce after 50 allows you to pay only for the advice you need.
Children of Divorcing Spouses
Whether children are aged 5, 15, or 25, children need to be considered as you navigate your divorce.
If children are minors, divorce proceedings are more complex because they may involve:
- Custody: You'll need to consider who gets physical custody (whom the child lives with), legal custody (who can make decisions for the child), or a combination of the two. For example, a couple amicably divorcing over 50 might agree to joint physical custody, joint legal custody, or joint physical and legal custody.
- Visitation: A judge may still allow a parent without custody of his child the right to visit him according to an agreed-upon schedule.
For the most part, when the divorcing parties are over 50, their children are also older, potentially even adults, which minimizes the above complexities. But don’t assume that if children live away from home, "they can handle it."
You may choose to end your role as spouse, but your role as a parent doesn't end with the signing of the divorce settlement. Handling your divorce process with your children in mind—keeping them informed, considering the impact of the changes on them, reassuring them of your love—is key to diffusing the tension generated by a divorce.
Financial Impacts of Divorce Over 50
The equitable division of assets and liabilities is a concern in almost all divorces, but for those undergoing a gray divorce, finances are more complicated. Not only is more wealth involved, but individual risk tolerances and the ability to recover from financial setbacks decreases. You should consider the financial consequences of divorcing in several areas.
Determine asset splits. Take a complete inventory of assets and then decide how to divide them based on life expectancy, age difference, and other sources of income available. You should consider bank accounts, retirement accounts, pension plans, Social Security benefits, and real estate. You need a post-divorce plan for each spouse that shows not just the current value of assets and income, but the potential future value, especially as people age, and investment portfolios' aims need to shift from saving and appreciation to consumption and income. A simple financial statement will not show the after-tax impact—and the impact on retirement—of how a division of assets may play out over time.
Evaluate current and future income. Divorce after 50 can substantially reduce the household income of the divorcing parties, leaving each with a sum of money with less purchasing power to cover expenses and save for retirement. This can result in a lower standard of living than they enjoyed before the divorce and a less comfortable retirement than they anticipated. You may need to secure other forms of income to continue paying bills and putting money toward retirement after the division of assets.
Assess health insurance needs. You aren't eligible for Medicare until age 65. This means that if you were covered by a spouse's employer-sponsored health insurance plan, and don't have your own health insurance, you may need to buy insurance from the Healthcare Exchange or obtain temporary COBRA coverage for up to 36 months from your spouse's plan.
Factor in alimony. These are regular payments that one spouse makes to a lower-income spouse to cover maintenance. You may be entitled to alimony if your spouse earns more than you earn.
Secure life insurance. The chances of alimony payments stopping increases with age, as the person to the end of his life expectancy. For greater financial security, if you have the consent of your spouse, you may want to get a life insurance policy under your ex-spouse's that names you as the beneficiary.
If you receive a tax-deferred account such as an IRA as lump-sum alimony, you will owe taxes when you start to withdraw from it; in this sense, your spouse can actually transfer his tax burden to you.
The Bottom Line
Divorcing is notorious for the emotional and financial toll it takes on middle-aged couples, who have probably invested many years together and amassed considerable assets (both personal and economic).
By addressing what is under your control and seeking guidance for your divorce questions and issues from the appropriately qualified professionals, you can accomplish a relatively amicable, but still comprehensive and cost-effective, gray divorce after 50.
Your divorce is specific and unique to you. One piece of advice applies to all individuals who divorce over 50; however, don't think that just because you're older, your life is over. Look forward to beginning the next phase of your life.