The divorce rate among people over the age of 50 has been increasing significantly. The divorce rate for people over 65 has spiked upward even more dramatically. Between 1990 to 2015, the divorce rate among people over the age 50 doubled, according to Pew Research Center. The rate for people over 65 tripled during that same period. With the increasing prevalence of divorce among people over 50, also known as “gray divorce,” there are six crucial facts that you need to bear in mind.

  • Finances and cash flow can be a major problem
  • Impact on children
  • Impact on your taxes
  • Prospect of alimony, maintenance, or spousal support
  • Healthcare after divorce
  • Retirement following a gray divorce

Finances and Cash Flow

Finances and cash flow are always a major concern when divorcing and a primary concern when a person is divorcing at an older age because of the prospect of a limited future life of earnings.  People are heading towards the end of their careers and the peak of their earning potential.  In many instances, a couple has been together for an extended period of time when they seek a gray divorce and usually one of the spouses has elected a supportive role for the family and the other with a primary focus of financial support to the family. For these and other reasons, a disruption of an existing financial structure and the likely impact on cash flow can be potentially devastating.

Impact on Children

Most people over 65 will not have children under the age of 18. Some people over the age of 50 will have children, especially if they married more than one time and wanted a child from the subsequent union. The reality is that a gray divorce impacts the lives of children, too because whether they are over or under the age of 18, future prospect for inheritance are limited by the requirement to divide the estate and make it work for each spouse. The stark reality is that a divorce will forever change the dynamics of your family.

Impact on Taxes

Taxes may be a major consideration during a gray divorce. Different types of retirement funds and accounts may have tax implications now rather than later due to the division of the estate and so it  is important to work with both an attorney and your accountant and ensure they work together for the best outcome from your tax liabilities. Your objective is to make certain all of the tax consequences associated with a divorce are identified and addressed before the issuance of a divorce decree.

Prospect of Alimony, Maintenance, or Spousal Support

Alimony, maintenance, or spousal support have the potential for being one of biggest issues in a gray divorce case. In Arizona, alimony is called spousal maintenance, and may be ordered if statutory requirements are met. With gray divorces many marriages are of long duration and therefore qualify for “lifetime” spousal maintenance. Oftentimes spousal maintenance can be balanced with the size of the estate each spouse has to live on, and this is an unpredictable area of family law. It may be important to seek out more than one consultation on this issue.

Healthcare After Divorce

Healthcare can present a unique problem when a gray divorce occurs. Many times, a spouse will be included on the health insurance policy of the other party to a marriage. While that can prove to be a wise and practical setup before a marriage ends, the reality is a divorce will impact directly this type of health insurance arrangement.  If one spouse relies upon the insurance through employment of the other spouse, they are entitled to stay on that insurance for three years post-divorce through federal law.

However, when that employed spouse retires, then both parties must seek replacement through a new policy or through Medicare.  Make sure you research all benefits available to you to ensure you make the best choices for your medical insurance planning after divorce.

Retirement Following a Gray Divorce

Finally, when it comes to understanding the unique dynamics of a gray divorce, consider that retirement is likely not too far in the distance (if it has not already arrived). Imminent or existing retirement demands that a divorce property settlement have a sharp focus on the financial needs and requirements of the spouses going forward into the future.

As a consequence of the potential financial problems and cash flow risks associated with a gray divorce, the need for legal representation is vital. You can learn more about the financial end of a gray divorce by scheduling a no-obligation, no-cost initial consultation and case evaluation with McMurdie Law and Mediation. Call today: 480-777-5500.