Divorce is hard at any age but there are several complications when divorcing at an older age. This sort of divorce is often called a “gray divorce” or a divorce where the couple is older. The rate of gray divorces is increasing dramatically as older people find it easier to get divorced and the risks of doing so are not as great as before. In fact, the rate of 50+ gray divorces has more than doubled.
According to the Wall Street Journal, the divorce rate for 55–64-year-olds has climbed from 5 per every 1,000 marriages to 15 divorces per every 1,000. For those that are 65 and older, it has risen from 1.8 to 5.
The baby boomers are mostly responsible for this change. Some are in their second and third marriages where the risk of divorce is higher. Women are financially more independent and Viagra allows men to end their marriages and find younger women. People live longer and empty nests sometimes make spouses realize that their marriages are empty too. Divorcing as couples approach retirement has unique challenges, because retirement requires massive adjustments, and adding a divorce creates added burdens.
Read on to learn more about the challenges of divorcing at this age:
Income After Divorce
Most spouses are concerned that they will not have enough income to provide for their needs if they get divorced close to or after retirement. Where there is a long marriage, maintenance or alimony may be ordered but where the breadwinner retires, that maintenance may be of relatively short duration (or none). Two households are more expensive than one.
For the spouse who has not worked, it is very challenging to try to re-enter the workforce late in life. Splitting retirement accounts can mean that neither spouse will enjoy the lifestyle they would have enjoyed had they not divorced. Compensation for older spouses can be far more complex than for the newly employed. Keep careful attention to the following when determining maintenance/alimony: bonuses, restricted stock units, stock options, business ownership, executive compensation packages, car allowances, and travel perks are all common features of employment and compensation packages for those at the peak and end of their careers.
Social Security and Divorce
On divorce, the lower-earning spouse may be entitled to receive Social Security benefits based on the work history of their spouse. Although the court cannot divide Social Security benefits in a divorce, if you can prove the following then you may be entitled to benefits:
- You must have been married for at least 10 years before the divorce;
- You must be at least 62 years old;
- You must have remained unmarried after the divorce;
- Your former spouse must be entitled to Social Security retirement or disability benefits; and,
- Your Social Security benefits are less than what your former spouse is entitled to.
The payments to the lower-earning spouse comprise a payment from that spouse’s earnings record plus a portion of benefits based on their former spouse’s record to reach the higher amount.
Survivor Benefits Upon Divorce
If your former spouse dies, you may be entitled to survivor benefits (also called death benefits) if your marriage lasted longer than 10 years, you are currently unmarried, and aged 60 (or age 50 if disabled).
Medicare & Health Insurance Coverage
You may qualify for Medicare based on your former spouse’s earnings record if you are eligible for Social Security benefits. Generally, you must be age 65 to qualify, but disabled, divorced widows or widowers under age 65 and disabled children may be eligible for Medicare after a certain qualifying period.
Timing to Receive Social Security Benefits
To collect spousal Social Security benefits, the lower-earning spouse does not have to wait for their former spouse to apply for Social Security benefits provided they have been divorced for at least 2 years.
Delayed retirement credits (an increase in Social Security benefits if you delay retirement past full retirement age) are not included in Social Security benefits based on the record of the former spouse. However, if you have reached retirement age and are qualified to receive your former spouse’s benefit, you may choose to receive only the former spouse benefit and delay your own retirement and receipt of benefits. A retirement delay could allow your personal benefits to catch up to or surpass the spousal benefits you are receiving.
Remarriage
If you receive spousal benefits, getting remarried will stop those benefits. If you later divorce again, you may be allowed to restart receiving the benefits.
Life Insurance and Health Insurance
If you receive maintenance/alimony, you should request that your spouse maintain a life insurance policy to cover the payments if the person passes. That may be problematic because life insurance policies can expire or become extremely expensive to maintain with age. You need to pay close attention to this issue.
Health insurance is a vital issue during a gray divorce. You need continued coverage, but it may be more expensive for you than for younger people who are divorcing. You must consider your health insurance expenses when negotiating your divorce agreement.
Changes in Health Insurance Coverage After Divorce
Getting divorced may change how you receive and what you pay for your health insurance. You will need to sign up for:
- Medicare coverage;
- Spousal Continuation Coverage;
- Coverage through your own employer; or,
- Individual coverage through the health insurance marketplace.
Long-Term Care
Following a gray divorce, you may lose the spouse who might have taken care of you in your later years. You need to consider long-term care or whether you might be eligible for Medicaid benefits.
The average cost for care in an assisted living facility is substantial and could consume all your savings.
People who are going through a divorce later in life should consider the costs of long-term care, including eligibility for Medicaid and whether long-term care insurance is available to finance the costs of future care. You may want to consult an elder law attorney to properly plan for future long-term care costs. The wrong divorce settlement could impact public benefits.
Division of Assets
In Colorado, the Courts divide all marital property equitably. That does not necessarily mean equally although equal divisions frequently occur. You should look at a split of 401(k)’s, state and local government pension plans and any annuities. Remember that retirement plans are generally taxable upon withdrawal so factor that in when allocating cash assets and the house versus retirement assets. If your spouse is a teacher, firefighter, police officer or government official, they will likely have a pension which could be the most valuable asset in the marriage. These are complex assets to divide and the value on the account statements is often far less than the value of the pension. Make sure you consult an experienced attorney to address these issues.
Estate Planning
When divorcing spouses are older, there is a higher probability that one of the spouses may die before the divorce is finalized. You should consider redoing your will/estate plan at the outset of the divorce to ensure that in the event you or your spouse die during your divorce so that the estate is properly divided. If you fail to do so, your current spouse may inherit everything if you die during the divorce. You should also review your living will and powers of attorney that may have been signed during your marriage and update any beneficiary designations. You do not want your spouse to make the decision about whether to discontinue treatment if you are seriously ill.
Does Your Spouse Have Competency Issues?
As people age, they may have issues that impact their competency to make legal decisions. If there are concerns about either party’s competency or his/her ability to make reasonable decisions during the divorce proceeding, it is advisable to address the competency issues with an attorney.
If competency is in question, you may need to have the assistance of a guardian ad litem. A guardian ad litem is appointed by the court to represent the best interests of a person who is not able to fully represent their own interests.
This will involve a verification of competency, which means seeing a doctor and providing current and past medical records. Competency is a very complicated process and you absolutely need attorneys involved if one of the spouses is incompetent. These sorts of cases are difficult to settle quickly or cheaply because the incompetent person must have people act on their behalf. These people will need to understand what is in the incompetent person’s best interest and doing so takes time and money.
Anyone going through a gray divorce should consult an attorney familiar with the issues and challenges involved. There is a lot at stake financially and you cannot afford to do it wrong, because in later years it is difficult to make up lost financial security.
Suzanne Griffiths is President, CEO, and Managing Shareholder at Griffiths Law PC. She was recognized by the Best Lawyers in America in 2019 for Family Law and was selected to Colorado Superlawyers from 2005-2019. She was also recognized in 5280 magazines for Top Lawyer in Family Law in Denver from 2016-2019.