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The Graying of Divorce

Property, Retirement Accounts and Other Questions

According to a 2019 Wall Street Journal Article, senior (sometimes called “gray”) divorce is at its highest level on record for those over 55, essentially doubling since the 1990s. Dr. Wendy D. Manning, co-director of Bowling Green’s Center for Family and Marriage Research said “It represents the baby boomers. A lot married young. A lot are in second marriages. Second marriages are at greater risk of divorce.”*

The implications of the gray divorce trend on the financial health and wellbeing of seniors is significant. Divorce can be disruptive, disheartening and financially damaging at any time, but for retirees, a split can be even more devastating and costly. Social support networks can be fractured, lives can be thrown into turmoil, and the most careful retirement plans—and decades of responsible saving—can be upended. According to a 2019 Bloomberg article, you can expect your wealth to drop by 50% if you are divorced after age 50!** Whether it’s you or even your adult children, there are deep implications for retirement and estate planning in a divorce. In light of the growing frequency (and the potentially significant con- sequences) of senior divorce, all seniors would be wise to familiarize themselves with the basic outline of their current household finances, and to understand the top priorities and key considerations that need to be addressed.

Be prepared: Expect change

The realities of living alone can come as a surprise, especially if you have been married for a long time. It can be expensive—your monthly expenses may increase dramatically almost overnight, not to mention the legal fees associated with the divorce itself. The time period immediately following a divorce can be bewildering and challenging, which makes it all the more important to address challenges with a practical, level-headed approach. Above all, you need to take the important steps necessary to protect yourself financially and seek advice to help adjust your plan.

Update your legal documents

Make sure that you have copies of all the legal documents you will need for the divorce, and for your new single life. Who will serve as your financial powers of attorney after the divorce? Who do you want to make decisions for you in a healthcare emergency? Make sure that your healthcare directives and living will match your wishes.

Update beneficiaries on your financial accounts

Think about things like insurance policies, financial statements and credit reports. Whenever possible, make copies of important joint documents and keep them safe and secure until assets are divided or distributed and/or your new individual documentation is issued. Make sure you change the beneficiaries on your accounts as quickly as possible to reflect the changes you are making on your own.

Consider the impact on your retirement funds

Beyond the divorce court rulings about what happens with beneficiary designations, you are likely to want to change them after a divorce. Do not assume that your ex-spouse will automatically be removed as the beneficiary. You will generally need to take action.

Understand the implications for real estate

No matter what age you are, your home is almost certainly the most expensive and most prominent asset that will have to be divided as the result of a divorce. Debates over ownership and value, questions about tax liabilities, and differing opinions on when and how to sell and or divide the property, can make dealing with real estate issues contentious and often complex. Because resolving these questions and converting a real estate asset into cash often takes time, additional funds must be set aside to maintain the property. Ensure that any changes in your real estate situation are reflected in both your financial and legal plans.

We want the best, but should prepare for the worst

One question I hear often from my clients is how to protect their savings from their son or daughter’s spouse, particularly when there is possibility of divorce. A common mistake is to make your adult child a legal co-owner on accounts. This action exposes these accounts if your child is divorced. There are other methods, through trusts or powers of attorney that allow your adult child to assist you without exposing your assets to their problems.

Get the right kind of support

Finally, and perhaps most importantly of all: in the event of a divorce, make sure that you surround yourself with people who can provide you with the emotional support and legal/financial planning guidance and insight that you need to minimize the damage to your long-term financial security. Once you are through the divorce, you should establish an estate plan or review your existing estate plan with your experienced elder law attorney. Remember that you must still protect your assets from catastrophic healthcare events. Things will change and your elder law attorney can help you keep your future on track.


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Dually certified by the National Elder Law Foundation as Certified Elder Law Attorneys and the Ohio State Bar Association as Specialists in the Area of Elder Law.