People are surprised when they hear of a couple divorcing after decades of marriage. But the truth is that gray divorces are on the rise.
However, couples divorcing in their 50s and 60s face unique situations not shared by their younger counterparts.
The financial implications
Perhaps one of the biggest challenges facing an older couple is the financial impact of a divorce, especially for women.
One of the primary financial concerns is dividing the retirement assets, which are often substantial and a major portion of their net worth. Dividing these assets will affect each party’s financial stability as they near retirement with limited opportunities to earn and save. A divorced couple may need to continue working longer or make significant changes to their lifestyle.
Dividing real estate is also more complex. In addition to the family home, the couple may have a vacation home and other holdings. Neither spouse may be able to take on the financial burden of maintaining the property or refinancing a mortgage.
There may be substantial investment portfolios in a gray divorce that must be divided. This may include stocks, bonds, mutual funds and other investments. Arizona is a community property state, which means couples must split all marital assets 50/50. Still, the fluctuating values and tax implications of transferring or selling these assets can complicate their division.
One issue that isn’t often discussed is that one partner may have handled all the household finances throughout the marriage, so the other spouse doesn’t have a complete understanding of their financial situation.
Anyone facing a gray divorce needs to discuss their situation with someone who can help them review the marital assets and better understand their finances. Without the proper guidance, one spouse may receive an unfair settlement and find themselves in financial hardship.