The rate of divorce in the general population is lower today than it ever was before. But, the generation called the baby boomers is divorcing like crazy. The divorce rate among folks 50 years old or older has doubled over the last couple of decades. This has led to the phenomenon called “gray divorce.”
Things have changed. Today, the so-called “gray divorce” is no longer a big deal. They say senior citizens who file for divorce late in life is something that no longer surprises people. In fact, divorce rates for people who are aged 50 years old or older went double between 1990 and 2010, said a research made by sociologists at Bowling Green State University.
People who engage in remarriages tend to have higher rates of divorce. However, the divorce situation is not exclusive to those who were married before. It has been revealed by the study about 48 percent of seniors who got divorced were on their first marriage.
Hopefully, this article will help seniors take a peek at what divorce has in store for them. This will help give them an idea on how to arrive at a well-informed decision when planning for gray divorce in the future.
Alimony is a sure thing in long-term marriages gone awry
Alimony is a sure-fire thing for older couples getting divorced compared to younger couples who file for divorce. Younger couples often have temporary set-up in terms of finances. For younger couples, alimony only lasts long enough until the other lower earning partner becomes more capable of being financially independent. Divorce attorneys surveyed said, in New York, older couples who file for divorce almost always get alimony for life. Legal experts say if both people are working they are more likely to shoulder shared financial responsibility. In some cases, the spouse that has a higher earning will be the one who may need to pay alimony to the other spouse.
Expect the retirement money to get cut in half
Some legal experts say more often the retirement funds can get slashed and may likely be divided evenly. This occurs even if one is not considered “at-fault” for the divorce. So, what seniors think of as huge money for their retirement years may be slashed in half after divorce. There is a tendency for some people to offer half of the retirement fund in exchange for not being required to pay alimony. This would result in a kind of lifestyle that’s less affluent than what one anticipated earlier in life.
Keeping the house means you need to lose something else
Women most often will stand ground and will not give up the marital home. It may be by emotional design or financial consideration. Of course, a lot of consideration should come before deciding to keep the home, especially if the court decides to split the property evenly between the two parties. Remember that if you choose to keep the home, then prepare yourself to give up something else. You will be asked about this during the asset division process.
The home has a definite value. But the other party in the situation will have to look for other assets to balance out things. There is a possibility that the other party will have to get a larger cut on the pension earnings or to get some cash considerations. However, owning a property also comes with property taxes and maintenance costs. Add in other costs associated with owning a home. The added cost can put some dent into the already unstable financial situation of a senior going through a divorce.
If you have been hiding something from your spouse, now is the best time to reveal it. Do this before the start of asset division process. If you have been hiding a bank account all these years from your spouse, then make sure to declare it now. You should know that it is illegal to hide assets. So, make sure your report of assets is comprehensive. Otherwise, you could be sued for fraud.
Gray Divorce -Can you even afford It?
Gray divorce can be a difficult time for seniors. Divorce is easier if you are younger, but not with seniors. There are extra considerations when people file for divorce during the twilight of their life. There are things seniors need to know including whether gray divorce is something they can afford.
Splitting the income may be harder for seniors
It is a difficult challenge for seniors to split the income. The financial impact of gray divorce can be staggering especially for those who are economically struggling. A senior may not earn as much as before. This is true especially if one is relying too much on retirement pension or savings. A significant cut in the earnings may no longer be enough to support a previous lifestyle. It is harder for seniors accustomed to a certain lifestyle to look at things when the finances take a hard hit. It is best for seniors to come into a realization that prior lifestyle may no longer be feasible if one files for divorce. A realistic approach to expenses may be needed in order to make gray divorce more affordable.
Realistic approach on divorce
You have to determine your exact post-divorce financial position. Make sure you have a vivid understanding of your spending habits. Also, don’t forget to take into account your possible sources of income. Put all these into your updated personal balance sheet. Then, work with your legal and financial advisor. This way, you can easily chart your most appropriate course all throughout the divorce proceedings.
Many seniors have been considering the thought of divorce. But, it’s only after a few years that they were able to finally to talk it out with their spouse. And, without having a clear picture of what each of them actually owns and owes, their divorce proceedings were filled with a lot of surprises they never expected.
Most often people who may file for divorce may not have a realistic understanding about the property owned jointly by the couple and the liabilities. Some of the folks may be in for a surprise when the assets are due to be split for the parties involved. There are people who get into gray divorce without having a realistic look of the financial situation. While divorce is primarily driven by emotions, it is important to be aware of the financial situation. Once the divorce bomb has been dropped, it is difficult to turn back. Before making the decision to file for a divorce, make sure to have a long hard look at all your assets and the liabilities. Do this before making an effort to communicate the idea of divorce to the other party.
Taking taxes into the equation
There are some who may have an attachment to a certain property, but are discounting the idea of taxes. Make sure the finances will not be greatly impacted once distributed on the account of taxes.
Some high-earning divorcees find themselves working longer than they originally planned. This means postponing their retirement to ensure that they are capable of paying alimony to a much younger spouse.
When in the process of asset settlements, don’t forget to always factor in taxes. Note that a $500,000 in retirement plan is much different from $500,000 as home value. Always take into consideration the after-tax value of whatever asset that’s discussed during the settlement process. This is to make sure you do not end up paying more taxes than you are required. Talk about how these taxes impact your cash flow after divorce. It is also important to know that alimony is a taxable income to the person receiving it.
Most of the time seniors trying to file for divorce are discouraged to do so. Older couples should make a conscious effort to really mend the problems or work with a counselor before considering having a divorce.
Reasons Seniors File for Divorce
There is this narrative forcing previous generations trying to stay together, but giving way to the desire to be happy—even outside of marriage. There is always a chance, seniors after several years of being together, the finances and marriage are no longer as aligned as before. It is important to keep an eye about the rigors of gray divorce to find out the reasons since more baby boomers are getting old and perhaps thinking about filing for divorce.
Seniors changing attitude towards divorce
Marriages are known to be vulnerable between year seven to year ten. It is now a head scratcher why there has been an increase in the number of filed divorce among seniors. In some cases, the seniors of today are unlike their parents who are seeing marriage in a different light. For the current batch of seniors, they have different inclinations about the hopes and aspirations about marriage. Since most seniors have adult children, it is easier to get divorced due to lowered responsibilities. This is contrary to when couples are younger and have to face heavier responsibilities. There are some seniors who may file for divorce not necessarily looking for a new love. But, to pursue other desires in which marriage can be a huge barrier. Some people, with the help of modern medicine, may find a new lease in their sex life. The people in their 50s or 60s are now seeking the love and sexual presence which they may have lost since they were in their 30s or 40s.
Seniors’ issues with finances and health care
When most people focus on their future retirement they plan for their finances but don’t plan on making provisions for a healthy marriage. Then when divorce becomes an issue, the finances they originally allocated for health and long-term care are divided and don’t cover the individual as well as it would have if they remained married. Additionally, the medical insurance they were depending upon from their spouse’s pension may no longer be available once they are divorced.
Seniors divorce because of differences
This is a no-brainer. Some seniors today are no longer tolerant of each other’s differences. So, they choose to end the marriage. As always, seniors need to really think things through and do what they feel is right. Divorce is a huge thing and can cause impactful changes in one’s life. It is only right to provide the right support to the people in the twilight of their lives going through a rough patch.
Questioning a Senior’s Capacity to Decide
Talks about gray divorce are never without asking if the senior is hundred percent capable of making the right decisions. This is because with advanced age might come some issues with mental health. Add in the fact that the elderly are prone to having the symptoms of Alzheimer’s or Dementia which are conditions that adversely impact cognitive skills. It is important that one makes sure that the senior can completely grasp all the myriad issues surrounding the process of divorce. Divorce is more complicated than what many people think. And, if you’re the one involved in it, it becomes even more complicated. The senior involved in the divorce process needs to be mentally capable of approving or refusing a settlement issue. If the senior is found to be mentally incapacitated to make decisions, then he also lacks the capacity to arrive at the right decision when making settlements. If a senior is found to have capacity issues, then he or she must undergo the proper evaluation to be able to determine such.
If you are among those seniors who plan to get a divorce, talk to your attorney to see if there are benefits of getting evaluated for capacity issues now. This is to ensure that any necessary action will be taken right away. So that capacity issues will not become a complication in your divorce proceedings.
Remember that your relationship with your spouse is the biggest determiner of how healthy you would be as you age. Studies reveal that marriage has a protective effect on one’s physical and psychological health. So, if you think your marriage is only hurting your chances of living a happy and healthy life as you age, start consulting a counselor now.