So-called ‘grey divorces’ are becoming more common in our society with increasing rates of divorce in the 50+ age group. Older divorcees face the same emotional pain as younger people, but often face unique challenges in attempting to maintain their former married standard of living. Usually, by this age, the majority of your working years are behind you, and perhaps there are limited assets after the expenses of the child-rearing years. Retirement funds and other assets are likely to be split evenly, and what seemed like a good deal of money to live on in retirement can look far more meagre when cut in half. As such, it is more important than ever to put together a plan for how you will live post-divorce, and to seek financial advice and spend time thinking about estate planning.
Women can find this an even more difficult time than men. Sometimes they are not aware of the full financial situation, especially when they have spent time out of the workforce in order to raise the family. Added to that, Australian women on average will live five years longer than men, but have a superannuation balance that is a huge 43 per cent lower. Fairly dividing the family assets in a split is therefore critical to maintaining quality of life.
One of the biggest decisions to be made concerns the marital home. For emotional reasons, many people baulk at giving up their marital residence. However it can be a decision that makes the most financial sense, especially when courts often split assets evenly. Remember: if you get the house, it has a value, and your ex is going to receive something to balance that value, whether it’s a larger share of a pension or a smaller spousal maintenance obligation. Further, houses come with other expenses that need to be taken into consideration. Keeping the house and giving up retirement savings or cash payments could put you in a dire situation.
On divorcing, there may be the incorrect assumption that you will always be covered by spouse maintenance. However, spouse maintenance is time-limited and the factors in determining maintenance are complex, including for example an assessment of the payee’s ability to meet their own ‘reasonable’ financial needs and their capacity to pay, as well as other factors such as the age and health of the parties. (For a complete explanation of spouse maintenance, see this excellent article from Mondaq: http://www.mondaq.com/australia/x/321884/divorce/Spouse+maintenance+or+alimony+in+Australia+fact+v+fiction)
Older people often find isolation more of an issue, post-divorce, and this can lead to depression. It’s more important than ever to build a support network and find ways to replace the companionship of marriage which has been lost. And if lucky enough to find love for the second time and remarry, getting a pre-nup can be especially important, in order to protect retirement savings which may have already been split once.
The silver lining of ‘grey divorces’ is that the issue of children become less salient. Usually, child support and parenting orders are no longer an issue. But adult children can still figure in divorce proceedings, with some parents continuing to provide financial support for adult children. However, such support is not usually written into a divorce agreement unless a child has special needs or is still in school.
The above information is general in nature. Please call Alliance Family Law to discuss your specific situation.