Gray Divorce (Divorce Over 50)

You may have seen reports on the news that the overall divorce rate is going down. That's true. However, the divorce rate for Baby Boomers has doubled. We're talking about the group of people who have generally been married for 20 to 30 years.

As the over 50 crowd lives longer, it's not unexpected that they might want to start a second chapter in their lives. More and more Boomers report feeling the need for a major life change later in life.

What do you need to know before getting a gray divorce? What are some of the special issues that people over 50 need to think about before getting a divorce?

Teenage Children And Gray Divorce

Teenage children and Gray Divorce

Most couples in their 50s are not going to have young children. If anything, they will have teenagers. This provides an advantage as you are not going to see a drawn-out custody battle in a gray divorce.

Teenagers, however, are subject to visitation schedules. The court will want to make sure that, even though they can have input into any visitation calendar, they need to participate in visitation with both parents in order to maintain a meaningful relationship.

Adult Children And Gray Divorce

When it comes to adult children, the biggest question is what is your financial burden towards them? For example, suppose you have a child who is 18 years of age or older. Are you responsible for paying tuition and other expenses for their college education?

Maybe you made a promise to your daughter that you would pay for her wedding. Perhaps you were thinking of leaving an inheritance to your children.

If you're going to get a gray divorce, it's vital that you do some financial planning. For example, take the case of the inheritance. If you don't have a will, then your hard-earned assets may end up going to your ex-spouse's future spouse or even to your children's future spouses (in case they get divorced). Bottom line: it may not go to the children you saved it for.

Because the court is going to want a thorough accounting of all of your assets and debts, it's vital that you include any promises or commitments you have to your adult children as part of the overall financial picture you portray.

Keep in mind that you need to prioritize your future financial stability. You may be on a fixed income or have a drastically different household budget than the one you are currently used to. If that is the case, some of your financial commitments to your children may have to be rethought.

A Change In The Household Budget

It's a fact that you will have more living expenses as a single adult than you did when you are married. Couple that with a drop in household income (as much as 40% after a divorce) and increased healthcare expenditures, and you could be facing quite the shock after your gray divorce.

There are several things you need to take into account. First and foremost is the house. You may be ecstatic that you get to keep the house, but did you take into account that it's probably an older home in need of maintenance and repair?

Before you think about dipping into your retirement accounts, have you considered that any joint accounts may be subject to a split by the court. Even if you have your own account, there are significant penalties for early withdrawals. 

We're not trying to paint a bleak picture here. The emphasis is on planning ahead of time. You need to get advice from an experienced attorney as well as a financial planner. The last thing you need is to find yourself in a budget crunch and then start burning through your life savings.

Increased Healthcare Expenses

Gray Divorce and Healthcare Expenses

Many seniors report that healthcare expenses are the most significant part of their household budget. Just about everyone experiences increased medical costs the older they get. With a divorce, there could be other issues to think about.

This is especially true if you have been on your spouse's insurance policy. If you are under 65, you don't qualify for Medicare, and the cost of COBRA coverage may be too high for you to afford it.

If your income is limited, and you need insurance with an affordable rate and good coverage, a good place to start is insurance through the Affordable Care Act. Help is available to assist with finding the right coverage that meets your budget needs.

Make sure that your attorney is aware of any significant medical expenses that will need to be addressed by the court in any divorce settlement.  You should also talk to a financial advisor that can steer you towards long-term care insurance. Eldercare is expensive and you should have a plan to address long-term healthcare needs post-divorce.

Preparing For Divorce Financially

Since finances are such a big part of any divorce, it's important, before you file, to make sure that you have a firm idea of the household assets and debts. Your attorney will want to know about all bank accounts, life insurance policies, retirement accounts, as well as monthly and long-term debts.

It's not unusual for one spouse to be the "bookkeeper" in the marriage. However, if you are planning a divorce and you're not the one handling the finances, it's important for you to get up to speed. Ask questions. Get a copy of your credit report. Start thinking about what a monthly budget will look like for you post-divorce.

Say Hello To The Tax Man

Just because you win big in a divorce settlement doesn't mean you should start smelling the roses. As with any major financial decision, your settlement may carry unforeseen tax consequences.

It's a wise idea to talk to an attorney or an accountant before there is an asset split in your divorce. They can guide you on big decisions such as keeping the house, how your alimony should be split, or what investment income to ask for. It's too important to trust that you can guide yourself through it without help.

Competency Issues In A Gray Divorce

There may be a situation in your gray divorce where one spouse has a diminished capacity to understand what is happening. Issues arise when one spouse is not capable of making informed decisions for themselves.

In a family law case, competency is determined by four criteria:

  • The person is able to make reasonable decisions and can communicate a clear choice when presented with one.
  • The person is able to understand what is occurring in a courtroom scenario.
  • The person can understand consequences and do not appear to be in denial of a given situation.
  • The person is capable of weighing the pros and cons of a decision.

What To Do If A Spouse Is Not Competent In A Gray Divorce

Spouse not competent in a gray divorce

If one spouse in a divorce is not competent, the court has several options. One option is to have a guardian ad litem (GAL) appointed. A GAL is a third party that speaks for the person who cannot speak for themselves.

In lieu of a GAL, if the incompetent spouse has adult children, the court may declare one or several of the children as the voice of the spouse. That way, their voice is heard from people who have the best interests of that particular spouse in mind.

If you are worried about being found incompetent at a later time, you can file a durable financial power of attorney. This way, another person can make financial decisions in your stead in case you are incapacitated. "Durable" is a legal term that means that the power of attorney will stay in effect no matter what happens to you.

The bottom line for competency issues is you want to plan ahead and make sure that you have a voice in the courtroom. Especially in a divorce scenario, all parties involved want to make sure that their interests are looked out for, even if they are incapable of fully taking part in the court proceedings.

Talk To An Attorney

Gray divorce (divorce over 50) is becoming increasingly common as more and more Baby Boomers decide to make life changes. There's bound to be a lot of financial baggage and commitments after being married for 20-30 years. That's why it's important to have a support team that includes an experienced attorney as well as a financial planner (and possibly, an accountant).

An attorney can help you sort out the household finances with an eye towards establishing a budget that the court can use to determine a split of assets. They can also help advocate for special needs with the court, such as commitments to adult children and healthcare expenses.

If you are in the Atlanta metro area, specifically Henry, Clayton, or Fayette counties, and are thinking of getting a gray divorce, contact Family Matters Law Group today. We pride ourselves on fighting for our clients' families, assets, and money.

With a gray divorce, it's very important to get a favorable outcome, to know that your finances and healthcare expenses will be manageable and will support your lifestyle. Hiring a caring, experienced attorney might just be the best move you ever made. We look forward to meeting with you and hearing your story.

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