An unfortunate trend occurring among older adults over the past several decades is an elevated rate of divorce. While divorce among younger couples is still more prevalent, more and more couples over age fifty, are ending their marriages in so-called “Gray Divorces.” In fact, the rate among senior citizens has tripled since 1990.

The reasons for a Gray Divorce are wide-ranging but can include:

  • Growing apart
  • Age disparities
  • Past regrets or resentments
  • Money and spending habits
  • The change from active to passive lifestyles
  • Escaping abuse

Whatever the reason for a late-in-life divorce, it is important to realize that the longer a couple has been married the more financially complicated a separation can be. It may go without saying, but it is exceedingly important for anyone going through a Gray Divorce to consult with an attorney.

Here are five financial considerations involved in a Gray Divorce:

1- Alimony. It is not uncommon for the former breadwinner in a Gray Divorce couple to be close to the end of his or her career, or, perhaps, no longer working at all. That means alimony payments, if warranted, should be carefully considered as you move forward.

2- Pre-Marital Assets. Different states have different rules regarding the division of a couple’s marital assets, as well as their debts. Often, divorcing parties keep their pre-marital assets. Determining which items are pre-marital and how much they are worth over the course of a long-term marriage can be complicated.

3- Retirement Accounts. Retirement accounts are of special consideration for Florida seniors. 401(k)s and Individual Retirement Accounts, or IRAs, can be numerically divided during Gray Divorce proceedings, though it can greatly diminish any compound interest effect. Dividing a guaranteed government or corporate pension is different, as they are retirement commitments from an employer to a worker until they die.

4- Life Insurance. An added expense to alimony payments can be the requirement that the payee must obtain life insurance equal to the amount and duration of alimony as stated in a divorce decree.

5- Social Security. When long-term marriages end in divorce, spouses may collect Social Security from the other party’s earnings. This should be discussed with your attorney.

Further, and perhaps most importantly, is the impact of divorce at any age on estate planning. Often, in estate planning, the former spouse is the decision maker and beneficiary. Divorce can change this significantly, even going so far as to treat the previous spouse as “deceased” for estate planning purposes. Do not wait to talk to us about the estate planning you need in light of Gray Divorce and let us answer your questions.