Today’s divorce rate has somewhat flattened in most age groups. However, divorce among older adults is increasing for many reasons, including age, spending habits, growing apart, lifestyle preferences and living longer lives.
A gray divorce occurs when an older couple with a long-term marriage files for divorce. These are a few things you should prepare for if you pursue a gray divorce.
Be prepared for the cost
A divorce can cost hundreds of thousands of dollars, and all your marital assets, including investments, retirement accounts and property, are typically divided, impacting your financial status. Your financial recovery could be challenging even if you still work.
Account for Social Security
You may receive a portion of your former spouse’s Social Security distributions. However, alimony awards can impact your eligibility for these assets. Therefore, learn how any financial distributions can affect your Social Security benefits.
Be prepared to prove property ownership
Because gray divorces tend to occur at the end of long-term marriages, most property becomes marital property, especially if you do not have paperwork proving you owned it before marriage. Even inheritance can become joint money.
Be aware of alimony requirements
If a judge orders you to pay alimony, you may also have to purchase a new life insurance policy in the amount of the alimony you will pay over a specific term. This requirement could cost you tens of thousands of dollars every year for a new policy.
Consider working with a mediator to protect your financial assets during a gray divorce. Do not try to hide assets and learn about all the requirements you may face before filing the paperwork.