Although the U.S. divorce rate has been dropping since the spike in the 80's, divorce among couples over 50 years old has risen to its highest level on record. Over the past two decades the divorce rate has doubled to one in four for what AARP has coined "gray" couples.
Generational views about marriage transform over the years. Over the past century there have been three phases of American views of marriage. First was the "institutional" phase in which marriages represented an economic union. Next was the "companionate" phase in which marriages were defined by the degree to which each spouse could fulfill his or her marital role. Now, in the "me generation," spouses are much more concerned with their own levels of happiness and fulfillment.
Once children leave the house and spouses become "empty nesters," finding common ground can become difficult. Many older couples find that their marriage was being held together by their children. The roles of mom and dad, rather than husband and wife, can lead to a more functional and less romantic and intimate relationship. When the spouses are left to themselves, the structure of their marriage is no longer as useful as it once was.
In gray divorce, it is usually the wife who opts out of the marriage. In fact, according to AARP, two-thirds of divorces among people over 50 are initiated by the wife. This can partially be attributed to the fact that women today are more financially independent than women of previous generations.
Other factors include an increase in life expectancy and the shift in cultural values of today's Baby Boomers.
The financial concerns relating to grey divorce can be more complex and burdensome. Retirement accounts like pension plans, 401(k) plans and Individual Retirement Accounts (IRAs) are typically treated as marital property in a divorce. The process by which they are divided depends on a number of issues. There are federal guidelines that dictate how 401(k) plans are redistributed, but IRA division depends on state laws. Dividing pension plans is the most complex process when it comes to retirement accounts, and is decided on a case-by-case basis.
It is necessary that spouses understand the language used in their qualified domestic relations order (QDRO). A QDRO is an agreement signed by a judge and sent to the Retirement Plan Administrator to determine retirement distribution. Many women, and even attorneys, often mistakenly assume that their divorce settlement agreement will fully protect their rights to their portion of their husband's retirement account. Because this is usually not the case, it is essential that all divorcing couples consult with a divorce attorney who fully understands retirement accounts and QDROs.
Stay at home wives must consider the fact that they will no longer be under their spouse's insurance once their divorce is finalized. In their new roles as single, older individuals, they will need to consider not only health insurance which can be pricier with age, but life, property and disability insurance as well. A woman who is receiving child support or alimony will also want to consider an insurance policy that can protect them and their family in the event that anything happened to their ex-husband.
Boomers who no longer want to hold on to their marriages can enjoy 25-30 years of newfound individuality and freedom, but because of the complicated financial issues that they will face it is recommended that they consult with a qualified divorce attorney who fully grasps the issues of grey divorce.
For in-depth information on all key issues related to late-life divorce, see Divorce After 50: Your Guide to the Unique Legal and Financial Challenges by Janice Green (Nolo).