Divorce rates have trended downward in recent years in many age groups. The notable exception is the continued increase of “grey divorce,” which involves couples 50 years old or above. The numbers of divorces in this age group rose from 10% in 1990 to 25% in 2019 with experts predicting the rate will continue to go up.
The circumstance of each divorce is a unique combination of factors, but typical reasons for this phenomenon include growing apart after the kids move out, different goals in retirement (such as more travel versus staying home), a spouse who continues work or start a dream business while the other wishes to enjoy retirement.
Long marriages or ones that involve a lifetime of accrued assets can pose serious challenges for those who file for divorce. While the hardest part may be explaining the decision to grandchildren, untangling finances and other complex issues can be headache-inducing and stressful.
Five issues to address in grey divorce
Retirement experts have tracked many issues, but five that seem to arise more than others are:
- Dividing retirement benefits: Pensions, IRAs and other benefits are generally equitably split because they are marital assets.
- Dividing assets: Long marriages often mean that all or most assets are marital assets unless there is a prenuptial or postnuptial agreement. It can even be challenging to separate premarital assets because they become mingled with marital assets or difficult to put a clear-cut value on.
- Insurance: One spouse typically carries the insurance through work, but this is discontinued once the divorce is final. Spouses will also need to update life insurance policies.
- Adult children: Kids may be busy raising their own family or deeply involved in a career, which means that they may not be able to (or do not want to) become involved. There may even be an awkward conversation where one or both spouses wish to move in with the kids and grandkids. The kids may also hear an unwanted litany of past transgressions by a parent.
- Not enough to go around: Planning for retirement is a delicate balance between supporting a lifestyle and saving for future retirement. Dividing the nest egg in two seriously alters that equation, often leaving the stay-at-home spouse struggling.
Legal guidance is often necessary
Regardless of whether the divorce involves courtroom litigation or mediation, an experienced family law attorney often can provide knowledgeable advice for splitting up marital assets. They may even suggest various strategies for saving money, such as choosing mediation over a long and contentious court battle.