What is “grey divorce”? It’s simply a shorthand term for couples aged over 50 who are going through a divorce. Sometimes called “silver splitters”, divorcing couples in this category are on the rise in Australia, according to statistics. Generally, this is due to factors like increased life expectancy and changing societal norms. In a nutshell, it’s far more acceptable to divorce these days, and people are therefore less inclined to stay in unhappy marriages.
But divorcing later in life can be quite challenging. Here’s why.
The 7 unique issues of grey divorce
1. The emotional and social impact of a grey divorce
Although all divorces have the potential to cause emotional upheaval, a grey divorce is often especially fraught. This is because when couples have been together for a very long time, divorcing can mean sacrificing a sense of security, familiarity and stability – even if the marriage was in fact ‘bad’. Facing the prospect of beginning afresh, alone, is typically more difficult at an older age, and older divorcees often face a degree of social isolation, meaning additional support can be needed. Having to reconsider retirement plans and possibly a change in location (such as to live closer to adult children for care) can also be very daunting. For some, a career may have been sacrificed for home-making, and spousal support may well be needed, as older people find it more difficult to become financially independent and recover from divorce. Couples can also be anxious about how their divorce will impact their adult children and grandchildren financially.
2. Dealing with more complex grey divorce property issues
Property settlements can be complicated and stressful at the best of times, but even more so in grey divorces. The division of a lifetime of assets can be very complex. Individuals might have extensive financial portfolios, with property, retirement savings, superannuation and other investments to be considered. Financial advisors, estate planners and tax experts often need to be engaged.
3. The challenge of previous marriages
Older people involved in a grey divorce are more likely to be divorcing from a second or even third marriage. This raises issues such as marital v non-marital asset splits (were assets obtained before this marriage or should it all go in the marital pool?). The children of previous marriages might need looking after, or there may be funds from a prior divorce settlement. Older remarried couples may well have put a prenup (binding financial agreement) in place, so there may be issues involving whether a binding financial agreement should stand.
4. Updated retirement planning is needed
Retirement plans can be seriously affected by grey divorce. When divorcing at a later stage in life, retirement plans may well need to be drastically altered. For instance, lifestyle expectations might need to be reassessed, or retirement put off in favour of working longer.
5. Sharing super and pensions
Properly dealing with superannuation and/or pensions in divorce is essential, but unfortunately, this is an issue that may affect older women more than their male counterparts. Many older women are just not as aware of their entitlements in regard to their spouse’s pension or super as they should be.
Making matters more complex, whether or not pensions are to form part of a divorce settlement will depend on factors such as whether a party is drawing from their pension at the time of divorce. This can affect whether it’s possible to draw a lump sum from a pension. But either way, pensions and super need to be shared fairly.
6. Spousal maintenance is often necessary
As mentioned, in grey divorces, often more traditional gender roles are seen where a wife has been a home-maker while the husband is the breadwinner, though both roles are valued equally in family law. If after divorce a wife can’t support herself and the husband is shown to have the capacity to pay, spousal maintenance can be ordered. The issue with grey divorce is that a primary earner, husband or wife, may no longer be working and have capacity to pay, if they are reliant on a pension.
7. Revisiting estate planning is critical in grey divorce
An important aspect of divorce is always updating estate planning documents like wills, powers of attorney, and superannuation beneficiaries. One potential difference for older divorcing couples is provision for adult children (which may also include children from former relationships). While the “Bank of Mum and Dad” can be extremely helpful for adult children, grey divorce couples need to be well advised on how to structure and ideally formalise such a loan, in order to prevent it from potentially being carved up if the adult child themselves divorces.
Involved in a grey divorce? If you’d like assistance with your divorce and/or property settlement, please contact Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.
