The challenges of a gray divorce
The Challenges You’ll Encounter During a Gray Divorce
While no two divorces are the same, ending your marriage at a later stage of your life comes with its own set of challenges. Between 1990 and 2015, divorces among people above 65 years old increased by over 100%. During a gray divorce, there are several issues that will need to be resolved before they can be finalized.
What Is a Gray Divorce?
There are a few reasons why the rate of gray divorces has been increasing as of late. One reason is that couples who remained together while their children were growing up might no longer believe that the marriage should continue once their children have moved out.
Divorce also isn’t as frowned upon as it once was, which makes it more feasible for older couples to split instead of attempting to weather the issues they have. An increasing number of women are also self-supporting, which lowers the possibility of women remaining in marriages because they’re unable to financially afford a divorce and the costs that come with it.
Among the most difficult aspects of seeking a divorce is dividing the assets that have accumulated throughout a marriage. If this marriage has lasted for decades, it can take some time to properly divide everything. New Jersey is an equitable distribution state, which means that your marital property won’t necessarily be split 50-50. Instead, equitable distribution allows for marital assets to be divided in a way that’s fair to both parties but not always equal.
However, the spouse’s contribution to the items that have been built up over the years isn’t taken into account. Even if one spouse was the main earner for many years of the marriage, this doesn’t mean that they will receive the vast majority of shared property. Any property that spouses earn before their marriage began is typically left untouched.
The difference between marital property and premarital property is the main issue that occurs while the property is being divided. It can be challenging to determine how an item is valued and who should receive it depending on the events that occurred throughout the marriage.
Conflicts might develop when one spouse claims an item that the other spouse also wants. When spouses are unable to come to an agreement, the situation can go before a judge. Most divorce cases that go to court take a considerable amount of time to resolve. In the majority of cases, a judge will determine how assets are divided. While New Jersey divorce attorneys can argue your case, a judge has the last say.
Social Security and Retirement Benefits
Difficulties might also arise when attempting to figure out how to handle Social Security and retirement benefits. Even though many divorce cases result in wealth being split between both spouses, deciding how to distribute any Social Security benefits can pose a problem. Social Security is provided by the U.S. government and is designed to help retired individuals pay for their day-to-day expenses.
When a couple divorces after at least one spouse becomes eligible for Social Security, the records of each spouse will need to be thoroughly examined to determine how much they should receive. Keep in mind that the current age for Social Security eligibility is 62.
Pensions are typically considered joint assets that both partners will have access to, which means that your pension will be divided during a divorce. Once the divorce is finalized, the funds should be deposited into each partner’s bank account. The same is true of retirement benefit funds. Any money that was placed in the fund during the marriage will usually be split equally between both parties.
Equal division of retirement savings can be a challenge to the spouse who earned this money from many years of working. While distributions that were made before the marriage will remain in the retirement account, this money might not be enough to support you during retirement.
While divorces are often most difficult on younger children who have yet to leave the home, these situations can also be difficult to handle for adult children who are busy managing their careers and taking care of their families. Many adult children will attempt to help their parents save the marriage.
If the divorce isn’t amicable, the children could be forced to take the side of one parent or another, which usually takes place when parents speak about uncomfortable aspects of their marriage. Once the divorce goes through, parents can receive emotional and financial support. In the event that your children are still attempting to establish their careers, this entire process can be overwhelming for them.
During a gray divorce, you can seek assistance from a New Jersey divorce attorney like ours to help you navigate the divorce proceedings and manage the difficult negotiations that need to take place between you and your spouse.
Health insurance issues might also occur if one spouse has been receiving health insurance benefits because of their partner’s employment. Once the divorce is finalized, any health insurance that the other spouse had access to will be instantly terminated. Having health insurance coverage is more important than ever during your later years because of the increase in health care needs and costs.
Another issue that divorcing spouses must contend with is what to do with a life insurance policy. Before the divorce goes into effect, the spouse who holds the policy can take steps to remove their partner as the main policy beneficiary, which can significantly impact the other partner’s future financial situation. Currently, there’s no legal scenario or argument that allows this action to be prevented before the divorce process starts.
It’s also possible for the person who holds the policy to remove their ex-spouse once the divorce is finalized, which is when it’s impossible for the partner to make a claim in court about the issue.
Estate Planning and Tax Considerations
Estate planning and tax considerations should also be taken into account. Following a divorce, most spouses will update their estate plan and create new documents to make sure that their former spouse is removed from any documents. The changes that need to be made depend on what the ex-spouse’s role was in the estate.
For instance, an individual may update their estate plan to remove their ex-spouse as a beneficiary. If their former partner was named a power of attorney for their financial or health care issues, this designation might also be changed.
There are also tax implications for any assets that are divided in a settlement. Let’s say that a home is now worth $600,000 after it appreciated in value by around $100,000. This real estate holding has different tax implications when compared to a standard investment account that’s valued at $600,000 alongside a $100,000 capital gain. Knowing what these differences are might be necessary during divorce proceedings.
If you believe that your marriage can’t be saved and that filing for a divorce is necessary, call our New Jersey divorce attorney at (201) 343-0078 to schedule an appointment or talk with us about your goals when seeking a divorce.