Navigating the Complications of a Divorce Later in Life
Late divorces, sometimes dubbed “gray divorces,” can bring with them a host of unique challenges and complexities to individuals who have spent a significant portion of their lives together.
Aside from the emotional implications, the end of a long-standing union can have far-reaching consequences on various aspects of life. The financial nuances of a late divorce can become incredibly complex, while questions surrounding retirement, estate planning, and spousal support can seem more confusing than ever.
If you are considering or are currently navigating a late divorce, it’s important to understand some of the complications you might face. Understanding these complications will better help you understand potential outcomes as you navigate the road forward.
Financial Issues in a Late Divorce
Couples who divorce later in life are more likely to have accumulated more assets (and in some cases debt) along the way than a couple that was divorcing after a relatively short period of time. Because of these accrued assets and debts, a number of financial issues will arise during a late divorce.
Assets such as individual retirement accounts, pension plans, and 401(k) plans are treated as marital property. Because Alabama is not a community property state, marital property is not automatically divided in half between both partners in a divorce.
Entering a late divorce and determining how this marital property is divided can be more complex and nuanced simply because more years have been involved in accumulating this marital property.
Other types of marital property including personal property and real estate such as the family home might be more difficult to contest when a couple decides to split later in life.
If a couple is filing for a late divorce, another important factor to consider is health insurance. Commonly, one party is under the health insurance policy of another. A divorce would subsequently mean that the policyholder no longer needs to carry their partner on their plan. The circumstances change if both parties are age 65 or older, as this is when many people can begin qualifying for Medicare.
Social Security Benefits and Divorce
Older couples who are navigating a divorce might be concerned about how their divorce will impact their social security benefits. Several factors will impact social security benefit eligibility with baseline factors including the following:
- A marriage must have lasted for a minimum of 10 years
- It does not matter if your former spouse has since remarried; you will still be eligible for social security benefits under them.
- However, if you remarry, your eligibility may be impacted. In order to be able to collect a divorced-spouse benefit, you must still be single.
- If you have remarried and then divorced for a second time, you might be eligible to collect a divorced-spouse benefit from either former spouse. Divorcees typically collect on the higher benefit, but you may not collect on both.
- You must be at least 62 years old.
- The social security benefit you receive is based on your employment history and must be less than the benefit you would have received based on your former spouse’s employment history.
Additional factors may apply depending on your unique circumstances.
Stressful Litigation Procedures
The overall litigation process of a divorce can be much more time-consuming, stressful, and overwhelming than a divorce of a younger couple. Many older couples might not have the time or energy to proceed through litigation. For this reason, many couples in a late divorce might find it more suitable to engage in mediation instead.
During mediation, both parties will try to come to an agreement about how to proceed in the divorce. Spouses will be engaged in a process that is overseen by a professional, neutral third party. This party can often be a lawyer, or it could be a retired judge.
The mediation process occurs outside of the court and can save both time and money for both spouses. Both parties can also have their own legal representation present to protect their best interest. Additionally, the decisions both parties reach during mediation are written down and documented through a legally binding contract that can hold both parties accountable for what was agreed upon.
It is critical for older couples navigating divorce to revisit their estate planning documents. Making sure that their estate planning documents like a living trust or a will have been amended to reflect their current standing and wishes in life is critical for both protecting their assets and their loved ones.