Challenges of Grey Divorce: Tips If You're Divorcing Over 50

Learn about challenges of a grey divorce and tips to reduce the complications.

Most people envision married couples in their golden years to be an inspiration. But what happens when your 25-year marriage is in trouble? Truthfully, grey divorce­—or, divorce among couples over the age of 50—is on the rise, and there are some special considerations you need to take before you file.

Grey Divorce May Be Expensive

Nearly every divorce is emotionally draining and time-consuming. Grey divorces have the propensity to be more challenging than the average divorce because spouses are often on a limited or fixed income. In some cases, couples are retired, which can make paying for a divorce (which can cost anywhere from $2,000 to $35,000 or more) nearly impossible. When you’ve acquired a significant amount of property, debt, and financial accounts, completing a do-it-yourself divorce may be impossible.

One of the best ways to save a significant amount of money is by utilizing mediation or collaborative divorce. The mediator—a neutral, third-party—structures and facilitates a conversation between the spouses in a controlled and safe environment. The process is voluntary, and because the mediator doesn’t have the power to make a final decision, if you’re not happy with the proposed terms of the agreement, you don’t have to sign the contract.

Collaborative divorce is like mediation in that the goal is for the couple to maintain control and create the best divorce agreement for both spouses. However, instead of the couple working out the details of their divorce with a mediator, participants in a collaborative divorce will each hire an individual specialized attorney (and a team of professionals) to create the ideal judgment of divorce.

The overall goal of mediation and collaborative divorce is for the couple to negotiate the terms of their divorce, create a marital settlement agreement to present to the judge, and avoid lengthy court hearings. Using the mediation process (which may be free, depending on your state), or the collaborative divorce process, allows the couple the ability to retain control over all aspects of their divorce, as opposed to a traditional divorce where a judge decides for you. Additionally, both processes are significantly less expensive (and time-consuming) than an absolute divorce.

Property Division and the Grey Divorce

Young couples going through a divorce may have some marital property and debt, but when you’ve been married for a decade (or more), it’s likely that you have acquired multiple vehicles, income or investment property, a family business, and financial accounts. Dividing property is an essential part of every divorce and couples with more assets tend to spend more money consulting with lawyers to negotiate a fair property division.

One of the best ways to protect yourself is to create a list of your assets, including both marital and separate property (anything you owned before marriage.) You should include real property (real estate), financial accounts, retirement accounts, and other assets. Be as specific as possible regarding when you acquired the property, how you paid for it, and how you used it during the marriage. Take some time to consider whether you would prefer to keep the property, sell it, or if it belongs to your spouse. It’s critical to fully disclose all your assets, up-front, in the divorce. If you don’t, it can delay your case or result in criminal charges.

Financial Advisers and Credit Reports

If you or your spouse contributed to a pension or retirement account, you should consider hiring a financial adviser to assist you in your divorce. A financial adviser can not only help you understand the ramifications of your property division but can also educate you on long-term planning tips after your divorce. It’s no surprise that if you’re getting a divorce after 50, you may not have as much time to rebuild your nest egg as a younger couple. Being prepared is one of the essential steps you can take in a grey divorce.

Hiring a professional can help you understand the financial impact of a divorce, but what about your credit score? Its common knowledge that today’s business world judges us on our credit score. From applying for a vehicle loan to renting an apartment, if your credit rating isn’t ideal, you may have trouble moving forward after your divorce. One easy way to protect yourself is to obtain a credit report from each bureau, review it for accuracy, and list the debts you share with your spouse.

If you live in a community property state, like California, the court may order you to pay half of your spouse’s debt, even if you didn’t benefit from it during the marriage. However, if you live in a state that divides property equitably (reasonably), the judge will probably only assign you responsibility for debt that you benefitted from throughout the marriage.

Plan, Plan, Plan

One of the best and most impactful ways to protect yourself in a grey divorce is to plan for your future. Retired couples may need to return to the workforce, but what if you haven’t worked in a decade? If your job skills are out-of-date, you may need to return to school, and the court can help you arrange this by changing your property settlement or spousal support award. You should come to the negotiating table prepared with information on the status of the current workforce, how you’ll fit in, and what your spouse needs to do to ensure that you’re successful.

What About Medical Insurance?

If you share your spouse’s health insurance, and you’re not yet 65 years old, you must have a plan for the future of your healthcare needs. Most insurance companies consider divorce to be a life-changing event that qualifies the employer to terminate the divorced spouse’s coverage. With both political parties continually fighting over universal health care, the insurance market has taken a hit, and you’ll quickly see that medical insurance may not be affordable after your divorce.

Advanced planning is vital to ensuring that your needs are met after a grey divorce.

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