If you are an older couple going through a divorce after a long-term marriage, it is referred to as a gray divorce (or a late-life divorce). When the term was first used, it referred to a divorcing couple who had been married for forty or more years. The assumption was that anyone who was married for that long must be older and starting to have gray hair, hence the name.
Now gray divorce more commonly refers to the wave of divorce among the baby boomer population, regardless of the length of marriage or color of hair. While the divorce rate has generally flattened throughout the country, gray divorces have more than doubles over the last two decades.
Going through a divorce is difficult no matter how long you have been married or how old you are. But if you are divorcing after a long-term marriage, you should really lookout for the following issues:
Identifying Pre-Marital and Marital Assets
Dividing marital property is one of the most important issues involved in any divorce proceeding. The first step in that process is identifying which assets and liabilities are marital and subject to division and which assets and liabilities are non-marital and not subject to division. Generally, this identification process becomes increasingly difficult the longer the marriage lasts.
If you have only been married for a short period of time, then it would be easy to determine which assets you and your spouse owned before your marriage. However, after being married for several decades or more, it is much more difficult to remember (and prove) what is pre-marital. Additionally, pre-marital assets can become commingled with marital assets, making them either part marital and part separate, or entirely marital.
Also, after accumulating assets over a long period of time, you may have a complicated portfolio of real and personal property, tangible and intangible. While a younger couple may only have a few things, an older couple may have many savings, investment and retirement accounts, pensions, multiple properties, etc.
As you start the divorce process, you should gather as much documentation as you can about your various assets. This will assist you and your spouse in the long run in determining what is marital and what is non-marital, along with valuing your marital assets.
Post-Divorce Finances
Going through a divorce will undoubtedly result in financial difficulty, at least in the short term until you figure things out. You will need to adjust your income streams and expenses to ensure you will not fall into ruinous debt. There are two ways to assist you in this regard. If you are
entitled to alimony or spousal support, that income stream will obviously help. It is also important to consult with a financial adviser, or do significant work on your own, to assist you in planning your financial future.
Health Insurance
It is no secret that health insurance gets more expensive the older we get. People in the 50 – 65 age group are a notoriously difficult group in terms of obtaining affordable health coverage. This can be amplified during a divorce, as generally both spouses are covered on one insurance policy. You can only cover your spouse under your health insurance coverage until the date of divorce. Upon divorce, it could be a long time until either or both of you are eligible for Medicare at age 65. Even after age 65 and with Medicare, health expenses are not cheap.
There are generally two options here. You could be covered by your former spouse’s plan under the Consolidated Omnibus Budget Reconciliation Act (COBRA), but you would need to pick up the tab for your premium. Alternatively, you could negotiate a greater or lesser alimony amount to compensate for the loss in coverage and an increase in cost.
Social Security Benefits
When couples divorce at or above the age when they become eligible to collect Social Security (currently 62), their records must be examined to calculate the amount each individual is eligible to receive. It is essential to know that although you are not eligible to receive Social Security in retirement if you did not work at least ten years, gray divorcees may qualify for benefits based on their spouse’s earning history if they were married at least ten years, even if they have not worked for a full decade.
Oftentimes, when two people are going through a divorce, their house is the most valuable asset that needs to be addressed. The question regularly becomes what happens to the home where the parties lived, many times with their children, prior to their separation and eventual divorce.