09 Mar The Financial Impact of Grey Divorce
Grey Divorce, Silver Splitters, Diamond Divorcees. Regardless of the way you cut it, they’re the terms referring to the demographic of older couples in long-lasting marriages who are now starting to separate.
The term originated in the United States and refers to couples who were splitting after around 40 years of marriage. Now, it’s commonly used for those that are separating after 20 or more years together. Just around the time you’d expect them to be settling into retirement together, divorce becomes part of the reality.
The Rise of Late Life Divorces
North Americans are living longer. Between 1921 and 2005 we gained about 20 years of life expectancy from 58.8 to 78 years for men and from 60.6 to 82.7 years for women. With the thought of multiple decades ahead people became more aware of what they want and need out of their relationships.
Longer life expectancy isn’t the sole reason for a late-life divorce. There can be many reasons but the ones which are commonly stated are empty nest syndrome, spending habits, active vs. passive lifestyles in retirement, or differences in sex drives — to which infidelity can be a byproduct.
Unfortunately, Grey Divorce is all about the math. And the cost of a divorce depends on the complexity of the couple’s assets together. Financial stability in the household often allows for a smoother divorce, but the financial settlement has a direct relationship to quality of life after the divorce.
Normally, as older couples begin to retire, they begin to collect pensions, delegate the future of their RSPs and consider downsizing their homes. Divorce will undoubtedly derail the initially perceived plan for these couples because of the variety of assets that need to be considered during a divorce. The financial impact of a Grey Divorce means that older couples may be forced to sell their home to divide the equity as well as take out retirement savings early in order to divide it accordingly. It’s also imperative to consider a holistic amount of spousal support, as one or both spouses are probably late in their careers. This can pave the way for a long and complicated process, and couples can incur extra taxes that they may have not previously considered.
More often than not, one spouse manages the finances. When the other spouse doesn’t have the wherewithal to manage their new financial independence, this can add a layer of complications to the divorce and their future.
When dividing conflicts arise, it can draw out the time in court and lawyer fees. It’s important to choose the right divorce professional, and wise to mediate a divorce.
Stewart Esten Divorce Lawyers
The financial implications of Grey Divorce can be burdensome and complicated. It’s possible you will have to reconfigure your retirement to be later than anticipated. This process can be difficult and emotionally draining. A skilled family lawyer can guide you in mitigating the effects of a late-life divorce. Contact Stewart Esten today to learn how we can guide you through this complicated time.