By Maureen Hansen, Wealth Enhancement Vice-President, Financial Advisor and Susan A. Hansen, Co-founder Family Mediation Center, Hansen & Hildebrand S.C. Family Lawyer
Divorcing is never an easy option, especially when you decide to do so later in life. Often referred to as “gray divorce”, this term is becoming more common in recent years as divorce rates among those over 50 years old have increased dramatically. Longer life expectancies and a rise in older women working, which makes divorce more economically feasible, are helping to drive the trend. Divorcing later in life comes with unique challenges, but it also presents opportunities for personal growth, financial stability and a fresh start.
At the outset, parties need to understand their legal process choices including the option of mediation in which a couple works jointly with one neutral lawyer. This is an alternative to the cost of two lawyers and risks of do-it-yourself. Professional education, either individually or jointly, is essential to assure informed decision-making and a clear understanding of both the current and long-term impact of legal and financial divorce decisions
The financial aspect of divorce later in life can be one of the most important and complicated parts of the process. After decades of marriage, both parties have likely accumulated assets and may be dependent on shared income to meet expenses.
Let’s look at ways to build a stronger post-divorce future:
- One of the first major considerations is the division of assets. Women in particular may face financial difficulties post-divorce if they have spent many years out of the workforce due to caregiving responsibilities. For couples who have built substantial wealth together, issues like allocation of assets and debts, spousal support, business valuation and planning, and family decisions such as funding their children’s college costs may come into play. The decision whether to stay in the current home or move is a major component of the division of assets that has both financial and emotional considerations. Navigating these issues with a financial advisor and divorce lawyer who specializes in gray divorce can help minimize potential conflict and create resolutions that ensure both parties receive a fair settlement and financial security.
- During times of transition, it is critical to review all estate planning documents and beneficiary designations to ensure they reflect your wishes and changes you choose post-divorce. Powers of attorney and health care directives should also be updated.
- When significant life changes happen, it is important to review all insurance policies and needs (health, life, property/casualty, home/auto, and umbrella coverage). This includes making sure beneficiaries have been updated and there is adequate insurance coverage. This may include specific life insurance coverage as a safety net to fill the void an ex-spouse’s death can create when child or spousal support terminates.
- Divorce later in life also comes with social challenges. Some people may feel disconnected from their peer groups or social networks. However, it is also an opportunity to explore your own desires and goals and build new friendships and relationships. Seeing an individual counselor can assist as you navigate the process and sort out your changing life goals.
Legal, financial and emotional advice can help mitigate risks and facilitate a smoother transition into the next phase of life. It may not be an easy path, but it does not have to be destructive. Ultimately, gray divorce can be the beginning of a new and potentially more fulfilling chapter.
Advisory services offered through Wealth Enhancement Advisory Services, LLC, a registered investment advisor and affiliate of Wealth Enhancement Group®. This information is not intended to provide individualized tax or legal advice. Discuss your specific situation with a qualified tax or legal professional.