What Is Gray Divorce and Why Is It on the Rise?
The term “gray divorce” refers to divorce among couples over the age of 50, often following a long-term marriage. Since the 1990s, the divorce rate among the 50+ population has roughly doubled, as reported by the Pew Research Center. In 2015, for every 1,000 people ages 50 and older who were married and then divorced. As of 2022, according to a study published by the National Library of Medicine, 36% of adults getting divorced are 50 or older. Leading factors contributing to this trend include the following:
- Changes to the meaning of marriage and its success, with a growing emphasis on personal fulfillment and happiness and rising individualism
- Erosion of the norm of marriage as a lifelong union
- Prevalence of remarriages, which tend to be less stable than first marriages
- Women’s growing financial autonomy which makes divorce a stronger possibility
- Increasing life expectancies, with increased risk of divorce
What Are the Special Considerations for Divorce After 50?
Gray divorce can be particularly challenging emotionally because it ends a long-term relationship and means major life changes.
Financial complications typically include dividing long-term assets, such as real estate, business interests, and retirement accounts, and the significant tax implications this may involve. Spousal support is an important issue after a marriage of a long marriage, particularly if one party has limited earning capacity. Changes in healthcare costs and Social Security benefits can create the need to reevaluate retirement plans.
Despite the challenges, gray divorce can present unique opportunities. Although it marks the end of a chapter, it can also be the beginning of a new and fulfilling phase. By seeking skilled legal guidance and focusing on personal well-being, individuals over 50 can go through a divorce and emerge with a sense of stability and new hope for the future.
What Are the Common Legal Issues in a Gray Divorce?
It is important to plan carefully and make informed decisions if you are divorcing after 50. The following are some significant legal considerations.
Division of Marital Assets
Marital property includes debts and assets acquired during the marriage by either or both spouses. Separate property is acquired before the marriage or by gift or inheritance. In an Ohio divorce, marital property is subject to equitable distribution, which means it is divided fairly, but not necessarily equally, between the spouses.
Property division in a gray divorce can be particularly complex because a long marriage typically means a more significant accumulation of assets. The following assets can present challenges when marital property is divided in divorce after 50:
- Real estate: The family residence and any other real estate holdings must be valued and divided. Either the family home must be sold, in which case both parties are required to move, or one spouse must buy out the other spouse’s share.
- Retirement savings: When a couple divorces after 50, retirement accounts can be substantial. In dividing 401(k)s, IRAs, pensions, and other retirement accounts, it is important to carefully consider tax implications. Qualified Domestic Relations Orders (QDROs) may be needed to ensure these assets are properly divided without penalties.
- Business interests: Division of business interests considered marital property can be one of the most contentious aspects of a gray divorce. To ensure a fair distribution, it is essential to obtain an accurate business evaluation. Possible solutions may include co-ownership, buyout of one party by the other, or sale of the business and a split of the proceeds.
Alimony
In Ohio, alimony is called spousal support. Courts have discretion in determining whether to award alimony, the amount of the payments, and how long the payments should continue. Factors they consider include:
- Standard of living established during the marriage
- Health and ages of the spouses
- Earning capacity of each spouse
- Duration of the marriage
For individuals over 50 who have been out of the workforce or earn significantly less than their spouses, alimony may be essential for maintaining financial stability. Because the duration of alimony is often tied to the length of the marriage, long-term gray divorces are more likely to include extended spousal support obligations.
What Are the Financial and Tax Implications of a Gray Divorce?
Divorce at any age can have a significant financial impact, particularly divorce after 50. Assets and income must be divided, which can reduce the standard of living for both parties. Financial and tax implications of gray divorce include the following:
- Healthcare costs: It is essential to maintain health coverage post-divorce. If you were covered under your spouse’s plan during the marriage, your health insurance costs could increase considerably.
- Retirement planning: The division of assets in a gray divorce can significantly impact your retirement timeline. Adjustments may be needed to your investment strategies and contributions.
- Social Security benefits: Divorce can affect Social Security benefits. If your spouse’s earnings are higher than yours and you were married for at least ten years, you may be entitled to claim benefits based on your ex’s work record.
- Taxes: Divorce can lead to significant changes in tax obligations. Your filing status will change post-divorce. Division of assets that involves the sale of real estate can lead to capital gains taxes. For any divorce agreement signed in 2019 or later, alimony payments are neither deductible by the payor nor included in the receiving spouse’s income, as stated by the IRS.
Divorce after 50 involves unique considerations and implications. Call Lawrence Law Office at 614-363-1273 to schedule a consultation if you are facing a gray divorce. We have decades of experience and know how to handle complex family law, business, and estate planning issues that may arise when couples divorce after 50.
