Older Couples Can Survive A ‘Grey’ Divorce with Good Legal Counsel
San Diego, CA – Statistics from 2014 point to at least twice as many over-50 people divorcing now than in 1990. The couples splitting after age 65 make up about 25 percent of those divorcing after age 50. This leaves the Baby Boomer generation, who already have high divorce rates in general, at risk for many financial risks. Along with them, also come unexpected emotional and social difficulties.
There are many theories on why this is happening. Some sociologists attribute the trend to the fact that it is much less taboo to walk away from marriage in general; others point to the fact that couples that had grown apart during the child-rearing and breadwinning years no longer have anything to talk about once the kids are gone and they are left alone with nothing in common. The fact that the baby boomer generation saw women win many victories in the women’s liberation movement probably contributes to their confidence in walking away from a situation they do not find satisfying, even later in life. There are a myriad of opinions about why this is happening, but there is a consensus that late-life divorce can be disastrous for seniors. So much so, that the idea of a legal separation is sometimes proposed as an alternative for those considering it.
Going Back to Work
The first difficulty affecting older people getting divorced is the general financial difficulty of having to pay all the living expenses. Since alimony is coming from social security or retirement savings and not from a regular paycheck, it can be meagre, to say the least. This leaves one partner, generally the wife, to earn the majority of her necessary maintenance money herself. If she has been a homemaker or otherwise out of the job market for a while, it is difficult for her to obtain anything other than a very low-paying non-specialized job.
Division of the Family Home
Next, comes the question about what to do with the family home. It may seem that being awarded the home is a big advantage in divorce, but at a more advanced age, it can actually be more trouble than it is worth. Even older couples today have mortgages oftentimes, having not paid off their home due to having moved or taken out loans against the home. So, the partner that receives the residence may still have to pay a monthly payment. Then, the general upkeep of the home, such as mowing the lawn, fixing plumbing problems, and so on–falls on that one partner. Because of age, a lot of that work has to be outsourced, which just adds to the expenses. Selling the home to obtain an affordable apartment or condo that has monthly maintenance built in can be a better option. A good financial advisor can help make that decision.
Another big hit that older divorcing people face is the loss of affordable health insurance. If they are under the age of 65, they are not yet eligible for Medicare. Technically, a spouse can stay on the other partner’s health plan for upto 36 months after divorce, but the payment will still be higher than some can afford. Choosing a legal separation instead of divorce can allow couples to disengage from one another legally, while still protecting themselves against economic hardship should their health deteriorate.
Retirement savings, such as the IRA fund and the value of one’s 401K (from all the money that was earned during the marriage) are treated as community property. They are divided equally and can provide a lifeline for older people starting life all over again. These savings, however, are threatened by divorce in an indirect way. The average cost of divorce these days is thousands of dollars. Many older couples find themselves dipping heavily into their retirement savings to pay off legal fees. Next, if a spouse that has been out of the workforce decides to go back to school to receive a certification that will enable them to earn a higher paycheck, some of that money may be coming from retirement. If a divorced partner got the home and perhaps a modest monthly allowance but is unable to obtain a job to pay for all the outstanding life expenses, the retirement savings become a rainy-day fund. Unfortunately, sometimes, there are many rainy days ahead.
Older people have much less time to recover from financial mistakes. If they are not looking far into the future with the legal decisions they make within their divorce or separation settlement, they have much less time to secure a comfortable retirement when the time comes.
If you are in San Diego, La Jolla or Carlsbad, California and need assistance in carrying out your ‘grey’ divorce in the most financially responsible way, contact one of our family lawyers today.
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