Whether you call it a gray divorce or a silver splitter, the end of a long-term marriage between people close to or past the age of retirement is a complicated situation. Numerous couples who have raised families together and possibly paid off a mortgage during their marriage will choose dissolution to pursue their happiness during their golden years in a solo capacity.
Gray divorces are subject to the same basic laws as any other divorce in Maryland, but they often have vastly different implications than divorces that occur earlier in life or after shorter marriages. Those who are contemplating divorce in their 50s or beyond will need to spend a bit of time considering the possible financial challenges detailed below.
A lifetime of commingled assets
Property division is always more of a challenge when couples have spent more years building a life together. All of the income earned during the marriage and property ranging from designer clothing to antique mid-century modern furniture will be subject to asset division in the divorce proceedings. Trying to find a fair and reasonable way to divide those resources can be a challenge, and couples may even struggle to identify and value all of their shared property after a multi-decade relationship.
Shared retirement savings
Couples typically prepare for retirement as a unit. They base their budget on the expectation that they will maintain one household. Both spouses may have contributed to a single retirement account or may have maintained their own savings, possibly through their employers. They may also expect to supplement their savings with Social Security retirement benefits. Divorce typically means needing to divide retirement accounts, even if the couple only held them in one person’s name. However, it is possible to divide the accounts without penalties in most cases, and lower earnings spouses can often request Social Security benefits based on an ex-spouse’s income if they did not accrue enough credits for retirement benefits or if they would receive far less than their spouse in benefits.
The cost of a divorce itself
Spouses who are able to settle things amicably can keep their divorce expenses lower, but those who end up embroiled and disputes and litigating key decisions about support and property division may spend several times more on a divorce than those who agree on terms. Longer marriages often lead to more intense emotions during dissolution, which can easily lead to unnecessary and costly conflict.
Those who are aware of the unique financial challenges that can affect a Maryland gray divorce may have an easier time avoiding common pitfalls. Carefully planning to handle financial challenges is important in any divorce, but perhaps especially in a gray divorce where spouses have much property to divide and minimal future income to replace what they lose during the divorce process.