Grey Divorce is the term referring to the rising rate in older adults, typically from long-lasting marriages, getting divorced. The term was coined as research showed the phenomenon of the overall divorce rate going down while the “grey-haired” demographic’s rate of late-in-life divorce was on the rise. The 50+ crowd currently makes up a quarter of all divorces and 1 in 10 is 65+.
There are a few reasons that researchers have found explaining the data of the increase in Grey Divorce. The first being that the couples who are typically married more than 20 years have simply grown apart and the stigma of divorce no longer exists as it did for their own parents' generation. This typically happens after the couple becomes empty nesters and realizes that raising children was what was keeping them together. The second is that due to a longer life expectancy, these couples are finding themselves in their 50s and 60s, unhappy, and with 20 to even 40 more years left to live -- and they want to do it their way. Finally, some couples report “losing the spark” while others say that who they were when they got married just isn’t who they are anymore. Many comment that they refuse to be complacent and want to find what makes them happy for their remaining years.
The reasons may differ but what is similar is that Grey Divorce is not the same as a typical divorce. Most Grey Divorce clients are retired, near retirement, or have reasons why they aren’t yet retired. Most Grey Divorce clients have grown children and even grandchildren. And most Grey Divorces will have a complicated division of assets due to the length of the marriage as well as the stereotypical generational roles of the husband as provider and the wife as homemaker.
If the High Earning Spouse is continuing to work in their business or their place of employment, then prior to retirement, the partners will need to look at the income of the parties and discuss Spousal Support awards. If the other spouse has not worked and they are in their 50’s or 60’s, it is unlikely that they will be able to become fully self-supporting at this stage. Therefore, there may be spousal support orders that remain in full force and effect up until retirement age.
A concern for both spouses is that there is one source of income that was previously supporting one household and one source of assets to be shared in one household, now the same income and assets will be required to support two different households. One of the factors that the Family Law Code considers is the lifestyle of the marriage. Often the Supported Spouse will argue that they need a greater level of support in order for them to continue in the life that they have grown accustomed to. This assertion may be stronger if the supported spouse is not the one who wishes to end the marriage.
Our role in mediators is often to assist both spouses in understanding the reality of the financial circumstances of the Couple. There may have to be changes made in the family budget and discussions on how the supported spouse can supplement any spousal support orders by returning to work in some type of capacity. The couple may need to cut back on discretionary spending in order for both spouses to be able to meet their necessary expenses from the Spousal Support payments and the income remaining with the Supporting Spouse.
There are many ways retirement will affect a grey divorce and it can depend on if you have already retired or are about to retire or if you are not financially able to retire yet. A grey divorce will likely wreak havoc on a retirement plan as income has dropped and now alimony as well as a division of assets will come into play. Mediation with a Family Law Attorney, particularly one who is a Certified Divorce Financial Analyst, will be very helpful.
Due to the longer length of the marriage (in California that is anything more than 10 years), alimony payments will not have an end date -- unless the recipient gets remarried. And oftentimes, the earning spouse was the one in charge of the finances, so the recipient of the alimony will need to become financially literate including learning how to balance a budget and understanding the. Retirement may need to be delayed or new jobs may need to be found by both parties. Other options will be to adjust your lifestyle to accommodate the new financial reality.
California is a community property state, which means everything from during the marriage is split 50/50 unless specific instructions were made. Anything before marriage, as well as inheritance, is separate property but you will have to prove it (unless your spouse doesn’t argue the case). Division of assets will include retirement benefits and savings. But there are so many more things to take into account such as total compensation (not just base salary), social security, 401K, pensions, etc. And then there’s life insurance. When you pay alimony you must include it in your life insurance with death benefits, which will increase your annual payment in addition to the increase based on your older age.
Often one or both Spouses will have an emotional attachment to the community residence. In many cases, this is the home that the children have been raised in and there are many memories that are part of the home. In Family Law, the home is a community asset and if one of the Spouses is going to keep the residence, then they will have to purchase their spouse out of their share of that residence. If there is a significant amount of equity in the residence or if the house is fully paid for, the spouse who wishes to keep the residence, will often have to take on a significant debt in order to purchase their spouse out of the share of the residence.
When mediating issues related to the Community Residence, we may want to bring in a Real Estate Professional or Mortgage Professional so that they can assist the Couple in understanding what this debt means and what income is required to be able to qualify to keep the marital home. In many cases, it may be better to downsize and purchase a smaller residence that can be fully paid for. Our role is to assist the couple in finding resolutions. It may be that there is a deferred sale of the residence in order to allow the resistant to be able to spend “one last holiday” in their home.
This all sounds overwhelming because it is. It’s a huge change! But you don’t need to have all the answers, you simply need to be educated. Hiring a mediator for a grey divorce will be the fastest and most cost-effective way to handle the process. There is no need to drag out a grey divorce in family court, litigating issues between a couple that has shared a life for many decades. Though it is going to be an emotional journey as you separate a life together, the technical aspects can make it easier, especially with mediation. Gather your paperwork, get organized, and your Grey Divorce can be processed so you can start your new life with dignity.
