Gray divorce is becoming more common, and according to the American Bar Association, the “50+ crowd currently makes up a quarter of all divorces, and one in 10 is 65+.” While there is never too late a time in life for a new start, it is important to be aware of the financial changes that come with a gray divorce.
As you consider ending a marriage later in life, you'll need to have a detailed understanding of your financial situation and make important decisions that will affect your retirement and beyond. In this blog post, we'll explore key financial considerations covered by U.S. News to keep in mind before pursuing a gray divorce.
What Is Gray Divorce?
Gray divorce refers to the growing phenomenon of couples aged 50 and older separating and ending their marriages. As baby boomers are living longer and healthier lives, they may also be reassessing their relationships and deciding to make significant changes, even if that means pursuing a divorce.
Financial Impacts of Gray Divorce
Assets, Expenses & Debt
Divorce can prove financially complex, and it is essential to have a clear grasp of your assets, expenses, and debts before moving forward.
This can include:
- Shared property value (homes, cars, investments, etc.)
- Individual and joint debts (mortgages, loans, credit card debt, etc.)
- Monthly living expenses (housing, food, utilities, transportation, etc.)
As such, it is important to be aware of your separate property, debts, and expenses. For example, after a divorce, your expenses can change significantly.
Financial Planning
Before a gray divorce, it's crucial to establish a financial plan that can outline your goals, resources, and desired lifestyle in retirement. This plan can help you understand the impact of your divorce on your finances and guide you as you make necessary adjustments.
A financial planner can provide valuable assistance as they help you navigate this process and develop a feasible strategy. According to Neil Furlong, a senior wealth advisor with Hightower Wealth Advisors in St. Louis, making a financial plan before divorce is crucial, as making adjustments afterward can be difficult. In addition, Furlong notes that most people end up working longer or even working part-time for the duration of retirement.
Estate Plan
When it comes to securing your financial future, estate planning is absolutely crucial. If you're going through a gray divorce, it becomes even more important to revisit your will and beneficiary designations to ensure they accurately reflect your wishes in your new circumstances.
Divorces can take many months to finalize, and if something were to happen to you during that time, your primary beneficiary would likely still be your ex-spouse. That's why it’s crucial to update your estate as soon as possible. In addition, to make sure everything is executed properly and to minimize any potential complications, it’s a good idea to contact an estate planning attorney who can guide you through the process and help align everything.
Social Security
Gray divorce can be a challenging process to go through, and it's essential to consider every aspect that could impact your financial state after the split. Social Security payments are one such aspect that often goes overlooked. If one spouse planned to take income from the other's Social Security plan, it could heavily impact both spouses' income streams after the separation.
Hence, it's crucial to have a clear plan in place and seek the necessary guidance to ensure that the split doesn't leave either spouse in financial instability. Social Security could come into play, and giving it the attention it deserves is imperative.
Contact Our Team for Guidance
A gray divorce requires careful consideration of your financial circumstances. By thoroughly assessing your finances, you can make an informed decision before pursuing a gray divorce.
If you’re contemplating divorce, contact our divorce lawyers at the Law Office of Alexandra White, PC.
We understand the complexities of divorce and the toll it can take on individuals and families. That's why we have a team of skilled and compassionate divorce attorneys who can help you navigate through the legal process and pursue the best possible outcome.
Contact us at (303) 647-4245 or reach out to us online today.
