Getting Divorced After 50 Presents Some Unique and Important Considerations
The term “gray divorce” is commonly used to describe getting divorced after 50. As we get older, not only does our physical appearance change, but our priorities in life often change as well.
Studies have shown that people get divorced later in life for a variety of different reasons. In some cases, empty nesters find that they no longer share common interests once their children leave home. In others, a divorce has been years in the making, and one or both spouses finally decide that it is time to make a change. In others still, the compatibility and compassion that supported a decades-long relationship simply fade away.
Options for Pursuing a Gray Divorce
While there are many unique aspects to getting divorced after 50, when it comes to the options for pursuing a divorce, spouses of all ages have the same options available. Broadly, these options include:
- Kitchen-Table Negotiations- Some couples are able to reach agreements regarding the division of their property by sitting together at the kitchen table. After the spouses reach their agreement, they each contact their respective attorneys to advise them of the “kitchen-table” agreement which the attorneys will incorporate into formal divorce documents for the court to sign. This method is typically the least expensive option because the spouses are not paying their attorneys to negotiate their agreement.
- Amicable Divorce with Attorney-Assisted Negotiation – Many older couples are able to resolve their divorces amicably. By addressing issues such as property division, debt division, and alimony with the help of their respective attorneys, spouses can minimize the financial costs and time required to complete the divorce process.
- Mediated Divorce –If the Kitchen-Table and the Negotiation approaches are not successful, then the courts require divorcing couples to attend mediation. Mediation typically occurs as a supplement to private negotiations. In mediation, the spouses (and their respective attorneys) work with a neutral third-party mediator who helps to clarify issues, identify common ground and explore creative solutions that allow the spouses to move forward. The couple has the final decision-making power in mediation. If the divorcing couple does not reach an agreement on their property, the couple’s next step is litigation, where a court will make the final decision on the issues not agreed to at mediation. The mediator is not a “private judge.” The mediator does not possess the power to make decisions for the divorcing couple-only the divorcing parties have the power to agree on their disputed issues.
- Arbitration— If the divorcing couple cannot reach an agreement on dividing their property, they have the option to pay an arbitrator to make a final decision on their property division. The arbitrator is usually a retired judge or an experienced family law attorney with an arbitration certification. There are pros and cons to arbitration which can be discussed with your attorney. An arbitrator can be thought of as hiring a private judge. If the divorcing couple hires an arbitrator, then they would not appear at a court where a State judge to decide the couple’s unresolved disputes.
- Collaborative Divorce – Collaborative divorce is a unique process that involves interest-based negotiation by the parties. The standard divorce process is set up to be adversarial in nature, whereas a collaborative divorce is focused on the parties reaching a mutually agreeable resolution. The parties and their attorneys work together to accomplish the parties’ goals. A formalized structure is used by the parties and their attorneys to provide efficiency in the divorce process while experts are also used to help facilitate the negotiation process. Collaborative divorce is not appropriate for all cases, but where it is appropriate, the benefits are numerous to the parties during the divorce and after the divorce is final.
- Divorce Litigation – When divorcing spouses are not able to come to terms on their own or with the assistance of attorneys, they have the option to take their divorce to court. While litigation is generally the most costly and time-consuming option, in some cases it will be the only practical option that spouses have available.
If you are considering a gray divorce, or if your spouse has indicated that he or she is prepared to end your marriage, attorney Christine K. Lincoln can help you evaluate all of your options and pursue the path that makes the most sense for your individual circumstances. The manner in which you pursue your divorce can significantly impact the outcome; therefore, it is imperative to make an informed decision.
Important Issues in Gray Divorces
When going through a divorce later in life, certain issues can take on heightened importance. These issues relate primarily—though not exclusively—to financial stability and independence. For example, when representing clients in gray divorces, we routinely advise our clients on matters related to:
Dividing spouses’ retirement savings is often a central issue in gray divorces. Since Texas is a “community property” state, the law requires a “just and right division” of the parties’ marital estate which includes retirement savings accrued during the marriage. Retirement accounts, such as traditional Individual Retirement Accounts (not Roth IRAs), 401(k) plans and pension plans are subject to income taxes which needs to be considered when dividing up retirement accounts. A dollar in a traditional savings account is not equal to a dollar in a retirement account which will be subject to income tax at a rate of 15- 40 percent at the time of withdrawal, depending on the income tax bracket of the person withdrawing from the retirement account. The type of retirement account needs to be considered as well as the tax consequences of the type of account when dividing up retirement accounts.
Health insurance is an important issue for all divorcing parties, but as people age, they tend to experience more health problems, making health insurance even more important for people over age 50. Many spouses receive health insurance through their employer or their spouse’s employer. Medicare provides health insurance to those age 65 and older. For those divorcing spouses under 65 and not employed or not able to receive health insurance through their employer, they may be able to receive health insurance through their spouse’s employer for a limited time after the divorce. If employer-provided health insurance is not an option, they may need to purchase a private health insurance policy. The cost and availability of health insurance is usually a high-priority issue for gray divorces.
Division of Substantial Assets
Many older couples have accumulated substantial assets. Generally, the more assets a couple has, the more complicated dividing their assets becomes. Obtaining accurate valuations for businesses owned by the parties, real estate, artwork, jewelry, collections, vehicles, boats and other significant assets is often a key first step. Many times, professionals are involved to determine the value of the marital assets. Divorcing spouses must be prepared to prioritize certain assets over others. For example, a business owner may want to keep a business and continue running the business after the divorce; therefore, one spouse would keep the business and pay the other spouse a dollar amount to compensate him/her for their portion of the value of the business. As discussed above, retirement accounts are often divided in a gray divorce and need to be considered for future financial planning of the parties.
Distribution of Assets with Sentimental Value
Over the course of a lifetime, assets can also take on significant sentimental value. When your divorce is over, will you want to remain in your family home? Are there certain other possessions you don’t want to live without? From hard-earned material assets to original family photos, protecting assets with sentimental value is often a key aspect of the gray divorce process as well.
Liability for Debts Post-Divorce
Along with dividing their marital assets, divorcing spouses must also divide their marital debts. These may include mortgages, lines of credit, car and boat loans, and credit card debt (among others). When going through the divorce process, it is important to address property rights, liability for debts, and financial support in tandem—as each can have a significant impact on a former spouse’s financial stability post-divorce.
Short-Term and Long-Term Financial Plan
Short-term financial planning is important during and after a divorce. Spouses will need to work with their attorneys to ensure that household bills are paid during the pendency of the divorce and each party’s financial obligations are met after the divorce. If one or both of the spouses are employed at the time of divorce, the financial situation will likely change after one or both of the divorced spouses retires. The parties’ income streams will need to be considered in the division of assets and debts in the divorce.
Long-term financial planning becomes important as we age regardless of our marital status. When going through a gray divorce, it is critical to consider your potential long-term care needs. Even if you are healthy and able-bodied now, things may change 10, 20 or 30 years down the line. If this happens, you will need to know that you are financially prepared.
Ultimately, a gray divorce should allow both former spouses to maintain the standard of living they enjoyed during their marriage, and neither spouse should experience new worries about his or her future financial or healthcare needs. With an informed and knowledgeable approach, a gray divorce can be—and should be—an opportunity for a new lease on life.
Get Started with a Confidential Initial Consultation
If you are preparing for a divorce after 50 and live in the Houston area, we encourage you to contact us for more information. To schedule a confidential initial consultation with attorney Christine K. Lincoln, please call 281-970-9005 or request an appointment online today.