The term "gray divorce" refers to those who move forward with a divorce later in life. Anyone that is over the age of 50 fits into this category. These individuals bring unique issues to divorce compared to those who are going through a split in their twenties or thirties. These individuals have had time to save for retirement and build their portfolios. As a result, these individuals must address the handling of these assets carefully during divorce.
Why the special care? Those who are savvy with their finances begin saving for retirement early in life. This money compounds and can result in a significant sum as we approach retirement. Although only one spouse may put money into the account, the court often considers this asset marital property subject to division.
There are some situations when a court may deem a retirement account separate property. One example: language within a prenuptial or postnuptial agreement specifically stating the account is separate property.
Retirement assets are not the only unique issue during gray divorce. These couples often have adult children.
What obligations exist with older children? As noted in a recent piece addressing this issue in U.S. News, older couples will likely need to address the college expenses of adult children. It is wise to address how these expenses will be covered within a divorce settlement agreement.
Are there any other concerns when going through a "gray divorce?" Senior couples going through a divorce must also address property division and spousal support issues along with other issues that can arise during a divorce.
Navigating these issues is complex and a misstep can result in unintended consequences after the divorce is finalized. You can mitigate this risk. An attorney experienced in high-asset divorce cases can discuss the many issues that can arise and better ensure your divorce settlement agreement accounts for any potential problems.