4 Main Challenges Of A Grey Divorce
Grey divorce is a new demographic trend, and it is rather concerning that this trend has accelerated in the 21st century. In the 1990s, only 1 in 10 people over age 50 were divorced. Currently, 1 in 4 people are going through grey divorces, and the rates may double in the near future.
Divorcing in a later stage in life is particularly challenging for couples. The experience is emotionally and financially traumatic and includes a long list of psychological side effects that lead to “burnout”. When the couple first expresses their dissatisfaction with each other and announces their intention to file for a divorce, the process might not seem problematic. However, once the divorce is finalized, the phase of self-realization presents difficulties, as the individuals face life after years of sharing love, memories, pain, laughter, tears, and experience in a long marriage with children and perhaps grandchildren.
1. Retirement Benefits and Social Security
While it is customary in divorce cases to split the wealth, the question of distributing Social Security benefits presents a different challenge. Social Security is a federal program in which the U.S. government provides financial assistance to retired people through money collected from payroll taxes. When couples divorce at or above the age when they become eligible to collect Social Security (currently 62), their records must be examined to calculate the amount each individual is eligible to receive. For one, a partner’s hard-earned pension is considered a joint asset for both partners and is therefore subject to division following divorce. This means that when the money is released, it is divided into equal amounts of funds deposited in both partner’s bank accounts. The same thing is done with retirement benefit funds. Generally, the rule of thumb is that the money accumulated over the period of time the couple were married is split equally.
This serves as a major challenge to the partner who has worked hard his or her whole life to ensure that life after retirement goes smoothly, but their benefits may be diminished if their partner did not earn as much as they did. Sometimes, the money is not sufficient to cover the bills of the two households as the separated couple begins their lives away from each other. The person is limited to what the partner earned while they were married. This means that whatever the person accumulated before marriage is untouched, but this amount might not be adequate compared to what is split between the partners.
2. Division of Assets
As mentioned earlier, the division of assets is a must when it comes to divorce. It is a real challenge, considering that the work a person has done over the years while in active marriage is split down the middle. The spouse’s contribution is not considered in this case. It can be extremely frustrating, but the law is the law.
It is quite clear that the property earned before marriage is usually untouched. However, one primary challenge comes from the need to identify marital and premarital property. It is much more difficult to determine these factors in grey divorce cases because of the length of the marriages.
The clear-cut determination of the value and amount of each person’s property is eroded by developments that occurred over the years during a long marriage. When it comes to the division of these properties, conflicts arise as each person tries to claim what exactly belongs to him or her. It is a significant challenge that can be fought over in court for extended periods of time.
The division of assets is ultimately determined by a judge and as much as the divorce lawyers will try to dictate what is “fair” from the perspective of each party, the judge ultimately has the final say.
3. Health Insurance
Health insurance affects the spouse who is not employed and has health insurance benefits provided by his or her partner. After the divorce has been finalized and both partners have gone their separate ways, health insurance for the partner who is not employed is immediately terminated. Not having insurance coverage during old age, when health often begins to deteriorate and health care costs increase, can present a major challenge for the uninsured. Another consideration is a life insurance policy, in which an individual can remove their partner as a beneficiary of his or her policy ahead of the potential divorce action. Again, this is a massive blow to the other partner. There is no formulated legal framework that can be used to prevent this kind of action unless the divorce process has already begun.
In addition, the individual holding the life insurance policy can still remove the ex-partner from the list of beneficiaries at will after the divorce has been finalized. This means that the partner cannot make a claim regarding the matter and is totally dependent on the kindness and goodwill of the former spouse.
4. Challenges for Adult Children
Most of the participants in a grey divorce have adult children who are living their own lives and are busy with their careers. The divorce between their elderly parents wreaks havoc for these adult children, who often put their personal lives on hold to handle the situations at home.
Most of the time, the children are unsuccessful in saving their parent’s marriage. It is a delicate situation because in some cases, the children might be forced to take sides and oppose one parent. This typically occurs when parents share embarrassing or uncomfortable details of their marriage.
After a divorce, the parents might lean on the adult children for emotional, and sometimes financial, support. This can be overwhelming for the children, who might be trying to find their way in life and establish their careers.
Grey divorcees, or silver splitters, face many challenges: Finances, health insurance, adult children, and division of assets are some of the problems that hinder diamond divorcees. They need financially neutral advisers to help them plan their post-divorce finances. A financial neutral can help couples determine and negotiate how they will divide savings and investments equitably.
Marguerita Cheng Contributor