Gray Divorce

Gray Divorce

A new phenomenon is taking place in America. Couples over 50 are divorcing in greater numbers than ever before, doubling for couples aged 50 to 64, and tripling for couples over 65 years of age, as compared to the rates in 1990. This is resulting in numerous concerns.

A new phenomenon is taking place in America. Couples over 50 are divorcing in greater numbers than ever before, doubling for couples aged 50 to 64, and tripling for couples over 65 years of age, as compared to the rates in 1990. In the past, older couples typically stayed together. Now, with “60 being the new 40”, they are splitting apart. This is resulting in numerous concerns, including the following:


Retirement Savings: Higher income and asset families had a plan for “their” retirement. They knew what would be needed to fund “their” lifestyle. But, if the need is now to finance two homes, and to pay double of many other budgeted items (such as utilities), will the plan still be sufficient? Each party will only have about half of the anticipated retirement income. The result of a late-in-life divorce can be the same as if the parties had failed to plan or start saving early enough in life for retirement.


Women and Life Expectancy: Since women’s life expectancy is longer than that of men, women, therefore, need more income or property to fund those extra years. Often these additional years of life expectancy for the wife are built into “their” plan. Nevertheless, she may only be entitled to half of the marital assets, resulting in her typically having a lower standard of living than her former spouse. If spousal support is awarded in Illinois under current laws, the recipient spouse, who is often the woman, may only be entitled to receive 40% of the parties’ combined incomes, giving her less ability to save for retirement. Additionally, many women enter the divorce process having always left financial decisions to their spouse. They are now disadvantaged both in terms of knowing what assets exist in the marriage, and also in understanding those assets and how to best manage their share moving forward. Having an attorney who understands the disadvantage is important.


Being Alone: As people age, medical conditions are more likely to occur. A divorce results in not having the other spouse available to assist, such as following surgery, or as one partner’s general health declines. This can result in expenses for care which were not planned for prior to the divorce. It is important to have an attorney who will explore the potential need to provide for long-term care insurance, or to require life insurance policies benefitting one or both parties.


Loss of Surviving Spouse Rights: Many pensions provide a surviving spouse benefit in the event of the recipient spouse’s death. Plans may permit a surviving former spouse to receive those benefits. Social security benefits also will be impacted by divorce. When to commence receiving social security benefits, at 62, 69, 70 or at any time in between, is an issue of which many attorneys may not be aware. A spouse of ten years or more may choose between their own acquired benefit or 50% of the amount of their spouse’s, or former spouse’s, benefit. However, the ability to receive a survivor benefit may be impacted by divorce, again altering “their” retirement planning. The impact of the dissolution of marriage on retirement benefits should be considered in any divorce, and requires the expertise of a qualified attorney.


Costs: Divorces are expensive to go through and can further reduce estate assets that had been counted on for retirement. Taking on a big and unplanned expense later in life, when the funds cannot easily be put back into the account over time, will pose a hardship. The allocation of these costs between the parties is an issue a savvy attorney will explain.


Need to Continue Work: Both spouses may need to work until a later age than originally planned in order to offset the financial impacts of the divorce. Family law courts may require a spouse who has not been employed outside of the home during the marriage to seek and obtain employment. If they fail to do so, an income may be imputed, further reducing the ability to retire.


Insurances: Issues surrounding health insurance and medical expenses are much more important at a later age. Getting to Medicare-eligible age with affordable coverage can be a big concern of older couples even if they are not divorcing. Long-term care insurance and life insurance are also issues to be addressed.


The New Reality: A great many clients initially come into the Feinberg Sharma, P.C. offices feeling overwhelmed by the uncertainties before them. Perhaps the hardest part of divorce for older individuals is working through financial unknowns which are unexpectedly replacing a carefully thought retirement plan. It can be very upsetting to consider that there may not be either enough money, nor enough years to accumulate adequate additional money, to finance their anticipated retirement dreams. After years together envisioning retirement on the balcony of a condo in Naples, Florida, what now?


Fortunately, having solid counsel from the start can go a long way toward resolving a divorce efficiently, insuring one’s share of the marital estate is protected, and wisely attending to seemingly minor details and questions which can ultimately have a big financial impact on the future. While adjustments may need to be made, we at Feinberg Sharma, P.C., time and again, also see our clients regain their hopefulness and enthusiasm for the future as fears of the unknown are replaced with well-informed plans for a happy new life.


© 2018 Kathleen Roseborrough for Feinberg Sharma, P.C.