Divorce after 50
In the last twenty years, the number of divorces among people over 50 has increased dramatically in the midst of a decrease in the rate overall. In 2008, some 300,000 couples experienced a “grey divorce.” And, if the current rate remains the same, the number will grow to over 400,000 in the next two decades. Part of the problem may be that many people after 50 are ending their second or third marriage, but it’s important to remember there is far more at stake financially and emotionally when divorce occurs in later years. Older adults often have accumulated wealth and developed deeper bonds that must be accounted for in the wake of ending their marriages.
Despite the wrangle often associated with reaching an agreement over assets, like homes and retirement accounts, it is frequently handled long before the wounds are healed. Though it’s easy to concentrate on the family home and other stable property like savings accounts, be aware that retirement plans are usually significantly overvalued during negotiations. It is very easy to forget the value of a 401(k) is pre-tax, meaning it may be worth as little as 65% of the stated amount. This miscalculation can make a solution seem equitable on paper, but come back to hurt the receiving party, particularly in common property states like California, Nevada and Arizona.
When you’re divorcing over 50, it’s easy to get lost in the division of “big things” and forget the small ones. By being more concerned with the house and cars, many don’t realize the importance monthly income has when splitting up near retirement age. Traditionally, alimony has been counted on by the lesser-earning spouse, but Social Security may be the better bet: if the marriage has lasted more than ten years and the individual is still unmarried at age 62, they are entitled to the higher-earning spouse’s benefits. Further, since the chances are greater the ex will die, it may be advantageous to have a life insurance policy that pays you directly – separate from their own – in the event of their death. It may seem strange, but it can be a way to provide stability and is immune to changes to benefit a new spouse.
When going through a divorce after 50, remember to take care of the kids! It’s very likely they will be grown and may even have families of their own, but protections must be put in place to guarantee any assets being passed to them after your death end up in their hands instead of your ex’s next spouse or their children. And, in the event they also get divorced, a “lifetime asset protection trust” will keep any of your monies from being taken from them. In the event you do have children under 18, make one spouse the guardian of the children and the other guardian of the funds as much as possible. This provides a system of checks to ensure both parties operate fairly.
Despite all the challenges of separating the shared property, the emotional task is often overwhelming. There are many things you can do to help transition into your new life. Take time to exercise, seek out support to share common experiences with and pursue your interests. The opening for personal growth is valuable and can lead to a better relationship the next time around, if you choose to get married again, as many do.