Two Key Considerations with Gray Divorce
Posted on August 9, 2019 1:11 PM by Gina
Did you know that couples over the age of 50 have the highest rate of divorce? A recent article in Forbes quoted a Pew Research study, which found that while there has been a 21% decrease in the divorce rate of couples between the ages of 25 through 39 over the last 25 years, the divorce rate among those in the 50+ age group has increased 109% during the same time period.
A further negative impact on this increase in “gray divorce” is the additional complexity of dividing assets following a long term marriage. Two areas, in particular, accumulated wealth and retirement income present much greater challenges to divorcing couples over the age of 50 when compared to younger couples.
The equitable distribution of property can be significantly more complex when couples divorce later in life, simply because there is typically more to divide. Laws determining the division community property (owned by both parties) vs. personal property (owned by only one of the spouses) varies by state.
Therefore, pinpointing the details of all property accumulated during the marriage should be made as early as possible when divorce is being considered. Examples of what to catalog include the description, title, and value of all:
- Community property
- Personal property
- Community debt
- Personal debt
After alimony, retirement income this is the biggest source of contention during a divorce settlement, according to an American Academy of Matrimonial Lawyers survey. The settlement of joint retirement income is a primary concern in gray divorce, for the simple reason that there is less time to recoup any losses. Considerations to be made during negotiations include:
- What percentage of your spouse’s 401k or pension are you entitled to?
- At what age can you begin collecting from your spouse’s 401K or pension?
- What will you need to do post-divorce to restore /increase your retirement savings?
Where to Begin
While there are many common areas of concern in any divorce, it’s important to remember that the financial details each couple brings to the table are unique, so retaining the services of a CDFA® is an ideal first step when considering divorce after the age of 50. The CDFA® can assist you in assessing all financial options based on your unique situation before you commit to a divorce settlement.
Download my free checklist Charting Assets to help you get started. Having this financial information organized will allow empower you in your decision making throughout the marital transition process.