Gray Divorce and Financial Complications

Since gray divorce may lead to financial shortfalls and even poverty, it’s crucial for spouses to pursue an equitable, financially reasonable settlement.

Since gray divorce may lead to financial shortfalls and even poverty, it's crucial for spouses to pursue an equitable, financially reasonable settlement.

Divorce after age 50, which is often referred to as "gray divorce," is becoming increasingly common among couples in Marietta and other parts of Georgia. According to The Washington Post, the divorce rate among this age group has doubled since 1990. Today, people over the age of 50 represent one-quarter of recently divorced Americans.

Although divorce can be an economic setback at any point in life, it may be especially challenging for these older adults. In some cases, an unfavorable division of marital property or an imbalanced settlement may have catastrophic financial consequences. Georgia spouses who are navigating gray divorces should be careful to understand this risk and take steps to avoid financial shortages after the separation.

Financial losses

As USA Today reports, divorce later in life often creates shortfalls because spouses suddenly must fund two separate retirements. This may cost up to 50 percent more than financing a shared retirement, according to financial experts. Legal costs may also reduce the amount of savings that divorcing spouses have to address these rising expenses.

Typically, people who have completed gray divorces must make financial adjustments to offset their losses. Spouses may have to downgrade their retirement plans, postpone retiring or return to work. Unfortunately, finding employment that yields adequate income may be difficult for older adults who have spent years out of the workforce.

Steep consequences

Given all of these issues, it is not surprising that gray divorce may put spouses at increased risk for poverty. According to The Chicago Tribune, one pending study has produced the following troubling findings:

  • Out of all divorced women over the age of 62, 30 percent live in poverty.
  • About 14 percent of men who divorced after age 62 are impoverished.
  • Just 4 percent of married couples in the same age group live in poverty.

Financial hardship may especially be a risk for spouses here in Georgia. According to U.S. Census data, the rate of Georgia residents living below the poverty level exceeded the national rate from 2009 to 2013. Considering this, it is essential for spouses to focus on minimizing their financial losses during gray divorce.

Critical divorce considerations

In Georgia, most assets obtained during marriage, including personal wages and retirement savings, are classified as marital property that belongs to both spouses. It is essential for all of these assets to be identified and properly valuated when spouses are dividing property. Spouses may benefit from seeking legal representation to ensure that no assets are overlooked and that complex assets, such as retirement accounts, are correctly divided.

Spouses who will be left financially disadvantaged after divorce should also consider pursuing spousal support, or alimony. When awarding alimony, a family law judge may consider each spouse's earning capacity, age, health and vocational skills. A judge may also take into account either spouse's role as a homemaker. Therefore, older spouses who gave up vocational opportunities while married may have grounds for seeking support.

Finally, divorcing spouses may want to look into mediation as an alternative to litigation. Mediation gives spouses more control over the way that assets are divided, and it can be more efficient. This can help spouses reduce divorce expenses while working toward a more tailored financial solution.

Seek professional help

Given the high financial stakes that come with getting divorced late in life, spouses who are preparing for gray divorces should consider speaking to an attorney. An attorney may be able to assist a spouse in pursuing a reasonable settlement through mediation or other means.

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