26 Sep Gray Divorce: Facing the Economic Challenges
A few months ago, we wrote a blog about a new trend they’re calling gray divorce—late-life divorce. These days, one out of every four people experiencing divorce in the United States is 50 or older; nearly one in ten is 65 or older. The reasons vary, but may include empty-nest syndrome, the increased number of women in the workforce, the desire for a better quality of life and higher rates of remarriage.
The emotional distress and challenges of gray divorce are similar to those of divorce at any age, but older couples face additional obstacles that magnify the difficulties. They often face a limited number of years in which they can generate income, have complicated assets and adult children who may get involved. There is another depressing statistic: for those on their second or third marriage, the rates of divorce are even higher.
Customize a team of advisers customized for your needs
If you’re an older couple facing divorce, many experts recommend identifying a team of professionals to guide you through the process. Depending on your emotional needs and the complexities of your financial landscape, this team may include a mediator, financial planner, accountant and/or therapist. If the divorce is uncontested—if you’re in agreement about the division of assets–California Document Preparers can help you get your divorce. Our team of family law specialists prepares and files all of the legal documents and is sensitive to the emotional needs of our divorce clients; we’re available by phone and email to respond to questions throughout the entire process.
In a gray divorce, working with a financial expert becomes more important because most couples have built up a lifetime’s worth of assets that must be valued and split. There’s the family home, pensions, 401k’s, brokerage accounts and life insurance policies to be taken into consideration. There may be the family business or investments in other ventures, expensive artwork, antiques, vehicles and valuable collections that also must be assessed as part of the estate. Valuing these complex assets and income streams requires time and expertise.
Who gets to keep the family home?
The family home is often a point of contention, especially with older couples. We all can understand not wanting to leave 20 or more years’ worth of memories. This was where you raised your children, where the family gathered to celebrate holidays and important events. There is the familiarity of the neighborhood and good friends. Given the uncertainties that lie ahead, the family home’s appeal can become amplified, as it represents familiarity and a connection to a former, happier life.
Hanging on to the family home may not make sense financially
Divorcing couples need to understand that when they were living together as a married couple, in many cases, they had two incomes. In their new single lives, there will be just one. It’s a time to get very realistic about finances and think pragmatically about how you will support yourself on one income. Be open to alternatives that will leave you in a better financial position. Selling a home or opting for other assets may provide the income you will need in the years ahead. That large family home with a swimming pool and extensive landscaping can quickly become a burden. Many divorcing midlife couples find that downsizing can dramatically help manage costs as they create new lives for themselves.