Did you know that the U.S. Census Department released a 2021 report showing that 34.9% of yearly divorces involved couples aged 55 years or older? This has been coined the “Gray Divorce” by The American Association of Retired Persons (AARP) to describe divorces involving individuals 50 years or older. The Gray Divorce often involves couples who have been married for 20 or more years. A divorce at any age can be a challenging and emotional process, but once you factor in age and length of marriage, the issues can be exponentially more difficult. First, let’s briefly talk about just a few of the reasons why older couples are getting divorced after having been married for most of their adult lives:

  • We are living longer! If you are 50 years old, you can expect to live 30+ more years. Imagine then if for the last 25 years (half of your life), you have been in an unhappy or unfulfilling marriage. Many decide they simply do not want to live another 25+ years continuing to feel incredibly unhappy or unfulfilled. With the stigma of divorce dissipating and the prevalence of “no fault” divorces, older couples are finding it easier to leave a lengthy marriage.
  • Growing Apart. Do you feel like you and your spouse have grown apart? We see this when couples become “empty nesters” and/or they retire. Suddenly, after 20+ years of being busy raising kids and climbing the corporate ladder, you may find yourself alone with each other and realize that you no longer have much in common. The struggle to adapt to these enormous life changes can put an untenable strain on an already strained relationship.
  • Personal Growth and Different Lifestyles. Of course, you change as you grow older. You may find a new hobby or passion and your hope and desire may be that your spouse will come along on that new journey. Unfortunately, this isn’t always the case. Your new passion or hobby may be of little to interest to your spouse, or your spouse may feel left out. Hurt feelings, resentment and distance can grow as a result.
  • Sex & Intimacy Issues. As you age, it is common for sex drives to change, and not necessarily the same as your partner’s sex drive. Spouses’ sex drives can be radically different from one another. Lack of intimacy can result, leaving you feeling frustrated and alone.
  • Money. Often older couples have accumulated significant assets and wealth. Even couples who have a high net worth can have money issues. Disputes with your spouse may arise over how to spend retirement, how to continue to invest money, and even budgeting issues. Financial disputes at any age can be problematic in a marriage, but for older couples who are looking at retirement in the immediate future, you may be concerned about how you will manage your finances to live without one or more incomes. This added strain can break the marriage. The Gray Divorce can present more complicated challenges than when younger couples divorce. Some of those challenges and some issues to consider are these:
  • Economic Impact on Retirement. If you and your spouse have been saving for retirement for the entirety of your marriage, you likely have amassed significant retirement assets, which may account for a large part of your marital estate. Dividing retirement can be challenging and not entirely uncomplicated. Not all retirement assets are equal. There are pre-tax and post-tax dollars, and often the need to retain experts to value certain other retirement assets, such as pension plans. Tax implications should also be considered.
  • Economic Impact on Women. We often see the “corporate wife” who, for most of the marriage, ran the house, raised the children, and supported their spouse who was the earner in the marriage. Divorcing women, especially later in life, can pose additional challenges and special considerations should be taken. The husband in these situations, if not yet retired, will go on after divorce to continue to earn significant income, while the wife will not given that she’s been out of the workforce for a significant period of time. There is simply less opportunity and time to rebuild wealth after divorce for the non-working spouses. Also, when the wife has not worked outside the home, she will likely have significantly lower social security benefits than her spouse. Social Security Benefits. If you have been married for more than 10 years, you may be entitled to half of your spouse’s social security benefits. You could be eligible for an additional amount up to the 50% spousal benefit if you qualify for your own Social Security, but the amount is lower than your spouse’s benefit.
  • Stocks and Stock Options. If you or your spouse work for a corporation, your estate may own employer stock incentives which need to be considered in your divorce. The lengthier the marriage, the more likely the number of stocks and options are increased. Stock incentives require additional analysis and valuation before they can be divided in your divorce. Another issue to consider in the Gray Divorce is that corporate executives often get full access to their options at retirement. Valuing the stock options is complex. Usually stock options have vesting periods, tax considerations and consequences, and hold various risks. It is important to understand the risk-reward and trade-offs when determining the value of stocks and options.
  • Spousal Maintenance (often referred to as “alimony”). Spousal maintenance or contractual alimony may be a consideration in the Gray Divorce, and should be considered by both parties, regardless of whether you are the spouse who was the “breadwinner” or the spouse who has primarily stayed at home and supported the working spouse. Many issues will factor into whether a spouse is entitled to spousal maintenance after divorce, including, but not limited to, the length of the marriage (the longer the marriage, the higher potential amount and longer period of time), as well as the size of your overall estate.
  • Complex Estates and High-Net Worth Individuals. If you have been a high wage earner and been in a lengthy marriage, your Gray Divorce may come with even more complexities and challenges. There may be business interests, irrevocable and revocable trusts, pensions, significant real estate, and other marital assets which may make dividing your estate more challenging, including valuation of assets and tax consequences associated with dividing the assets.

These are but a few of the issues to consider if you are thinking about a Gray Divorce. If you have been in a marriage for 20+ years and are thinking of divorcing, schedule a consultation with an experienced attorney at Maples | Jones, PLLC. Make sure you understand the process, know your options, and make informed decisions before moving forward in your divorce.

DISCLOSURE: This blog is being provided for informational purposes only. The preceding information should not be construed as tax, financial or legal advice.