Gray divorce is a term usually referencing divorces in couples who are 50 years old and older. The baby boomer generation is currently experiencing a rising trend in divorce rates. Meanwhile, in millennials and Gen Z, divorce rates are declining. The special challenges and implications of gray divorce make it different from divorces of younger couples. The phenomenon is turning into an area of interest for sociologists, financial planners, and family law practitioners.
What is Considered a Gray Divorce?
Defining Gray Divorce
The term “gray divorce” came into common use around 2004 after being used by an article in AARP. The organization used it to report on the increase in the divorce rate in couples over the age of 50.
As many of these divorces involve long-term marriages, the parties often have many joint assets and debts to divide. They often have special considerations as the parties are often retired or approaching retirement age. The parties may be thinking about long term care and how their life will change if they no longer have their spouse for support.
The gray divorce phenomenon is not just a trend in the United States but has also been noticed in other countries.
Reasons for the Rise of Gray Divorce
Extended Life Expectancy
Today, people tend to live longer and healthier lives. This fact puts a person in a situation where they might reconsider their life choices. A person may try to find self-fulfillment in later years by ending an unhappy marriage.
Changing Social Norms
Attitudes to divorce have changed dramatically over the last few decades. The stigma of divorce has declined substantially and it’s more socially acceptable for married couples to divorce later in life.
Further, those who started their marriage practicing more traditional gender roles common at the time they married, may no longer be willing to fulfill those roles now that social norms have shifted. Alternatively, the other spouse may be frustrated that the other party is no longer willing to follow the more traditional roles or has had an ideology change over time. It can be difficult to remain married if your fundamental ideologies have drifted apart.
Financial Independence
Many seniors, especially women, are more financially independent now than in prior generations. This allows a person in an unhappy marriage to leave their partner as they have the means and confidence to do so.
Empty Nest Syndrome
Couples whose marriages have been on the rocks find themselves alone when the children leave the house. They may look differently at the value of the relationship once the children are grown.
Personal Growth and Self-Realization
As people mature, they may find a more intense sense of self and personal goals in life. This can lead them to a realization that their marriage doesn’t align with their aspirations and values anymore.
Unique Challenges of Gray Divorce
Financial Implications
Dividing assets and retirement savings in gray divorces can be complex. Retirement may be nearing or already there. After dividing the assets and debts, each spouse often ends up with about half of the marital estate.However, expenses usually increase since there are now two households to support If the spouses are already on a fixed income or have little time to try to recover financially before retirement, special considerations may be needed. Deciding how to equitably split assets and debts can significantly affect retirement plans, living arrangements, and financial security. This impact is especially significant in gray divorces, with fewer working years left to rebuild savings.
Health Insurance
Health issues often become an increasing concern as people age. For the spouse covered by the other spouse’s insurance policy, the loss of health insurance can be problematic.
New Responsibilities
Especially if one spouse has health issues or the spouses have fulfilled more traditional gender roles, there may need to be additional planning for a spouse that has to take on new responsibilities.
If one spouse has been the primary caregiver, they may need to arrange daily help or long-term care for their partner. This is crucial if the other spouse cannot manage their daily activities independently. Additionally, a spouse who hasn’t handled finances before may struggle with financial literacy if the other partner always managed the budgeting.
The Emotional Impact
A gray divorce can lead to a loss of companionship, broken routines, and shifts in family dynamics. These changes often result in feelings of loneliness and depression. While younger couples may also experience these challenges, gray divorce can bring specific difficulties.
For example, one spouse might not drive or may have relied on the other for social connections. Without work or school to meet new people, they might feel more socially isolated.
Legacy Transitions and Inheritance
Gray divorces often present unique challenges, especially for older couples. Divorce attorneys understand that older adults may face issues due to the length of the marriage and shifting family dynamics. Long-established traditions might change when spouses no longer want to host holidays together.
Adult children, who may have taken on caretaker roles, can strongly influence their parents’ decisions. Inheritance concerns can arise, particularly if there are children from previous relationships. Older couples might also need to plan for the transition of a family business or the division of multiple properties.
Financial Considerations
Division of Assets and Debts
It’s important to ensure the division of assets and debts allows both parties to fulfill their financial needs. The equitable distribution of assets and debts generally includes:
- All tangible property, including things like household goods and furnishings
- Real estate and any mortgages
- Vehicles and any Vehicle Loans
- Long Term Care and Life Insurance Policies
- Bank Accounts and other Financial Accounts
- HSA and FSA
- Retirement and Pension accounts
- Annuities
- Credit Cards and other Debts
- Investments and more
Alimony and Spousal Support
Especially when one spouse was clearly the higher earner, alimony may be a key consideration in a gray divorce and is dependent upon factors such as:
- The length of marriage
- The standard of living during the marriage
- The financial needs and earning capacities of both spouses
- The length of time until each spouse can draw Social Security
- The assets and debts available to divide
Social Security Benefits
A spouse may be eligible to claim benefits based on their ex-spouse’s earning record. This may be the case if their marriage lasted for not less than ten years.
Estate Planning
Estate plans, wills, and beneficiary designations should be updated post-divorce to ensure that all assets are distributed according to the individual’s desires and new marital status.
The Gray Divorce Revolution
Understanding the unique aspects of gray divorce helps individuals navigate this life transition, coming out the other side stronger and more resilient. For best results, retain an attorney to assist you in protecting your rights.
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