While gray divorce rises, misconceptions persist about division of property
As the Washington Post recently reported, divorces involving older spouses have soared in recent decades. About a quarter of all divorces now involve a spouse who is over 50, leading to what sociologists are calling a gray divorce phenomenon. In addition to the demographic changes, gray divorce is also bringing up difficult questions about retirement and finances for many older people. In fact, later-in-life divorce tends to give rise to complicated financial issues that many younger divorcing couples tend to overlook.
Stakes are high
One of the biggest issues affecting spouses going through a gray divorce is the lack of time they will have following their divorce to rebuild their finances. Many such spouses may only have a couple years left before retirement, for example, if they are divorcing in their late 50s. As a result, an expensive divorce can lead to diminished funds for a retirement or may necessitate a person working a few extra years.
With retirement fast approaching, the financial stakes in a gray divorce are much higher than they tend to be for younger couples. With only a very few exceptions, a divorce order is permanent and how a court ultimately decides to divide a couple's marital property usually cannot be changed following a divorce. People who fail to ensure their right to a fair division of that property could end up compromising their desire for a comfortable retirement.
Pensions and benefits
Despite the rise in gray divorce, pensions and Social Security benefits remain significant assets that are still often overlooked in many divorces. Retirement funds can usually be divided between both spouses, even if only one spouse's name is on the actual account. However, as USA Today points out, many spouses wrongly assume that a court will simply make sure that their right to a share of the retirement funds will be protected. Instead, a Qualified Domestic Relations Order (QDRO) will be needed to ensure retirement funds are divided between both spouses after a divorce.
Similarly, Social Security benefits can also be divided between two former spouses so long as the marriage lasted for longer than 10 years and the beneficiary is unmarried and over 62 years of age. Since researchers say that about half of all gray divorces involve first marriages that have typically lasted for longer than 10 years, dividing Social Security benefits is another financial consideration that will likely take a more central place in many divorce cases in the coming years.
Due to the serious financial concerns that are raised for older couples considering divorce, it is extremely important for such couples to seek out professional legal advice. A qualified family law attorney can help older divorcing spouses understand the complex issues raised by divorce and what they can do to protect their finances and future.