Virginia Gray Divorces Can Cause Unexpected Financial Complications
Divorcing later in life is a step that a growing number of couples in Richmond are taking. According to The Washington Post, couples who are older than 65 now constitute about one-tenth of all recently divorced couples, while couples over age 50 represent one-quarter of the same group. Furthermore, the divorce rate for these older couples has doubled since 1990.
Many people who are considering gray divorce expect to face the financial hurdles that are inevitable in almost any divorce. However, these couples should also be prepared to deal with distinct issues that may not come into play in divorces between younger people.
Challenges during gray divorce
Gray divorce creates unique financial considerations primarily because it occurs at a lager stage in life. Spouses typically have had more time to accumulate assets, but they have little time left to prepare to retire as individuals. The Pittsburgh Post-Gazette notes that, due to these factors, a gray divorce often involves the following issues:
- Complex property division – Older spouses often have more property, and much of it may be complex property, such as retirement accounts. Correctly valuing these assets can be difficult, and some can only be divided through a Qualified Domestic Relations Order, which is a highly technical document.
- Planning for retirement – Funding two separate retirements, rather than one joint retirement, can cost 40 to 50 percent more, which means that spouses who were on track financially may still struggle after a divorce. Additionally, spouses may have little time before retirement to save for these enhanced expenses.
- Increasing earnings or savings – To offset financial losses, spouses typically must work or save more, but this can be difficult if one spouse is more dependent on the other. A spouse who left work or turned down employment opportunities may have trouble finding work with adequate income. The loss of certain benefits upon divorce, such as shared health insurance, can also be burdensome for financially disadvantaged spouses.
These issues make it essential for older spouses to understand their rights during divorce and make sure they do not lose out on any property or support they are legally entitled to.
Property division and alimony
In Virginia, most property acquired during marriage, including personal income and savings, is considered marital property. Property that spouses owned before the marriage or received as an inheritance is considered separate property. Most of the time, any appreciation in value of separate property and any new property purchased with separate property remains separate property. During divorce, marital property is divided equitably, while separate property stays with its owner.
A family law judge considers various factors to arrive at an equitable distribution of property. The age and health of each spouse, the grounds for divorce, the length of the marriage and the ways each spouse contributed to the marriage, whether monetary or non-monetary are just a few of these factors. The liabilities and financial standing of each spouse may also be considered.
If one spouse is significantly economically disadvantaged, he or she may receive spousal support. A spouse’s education, earning capacity, separate property and decision to give up employment opportunities for the marriage can all be taken into account when spousal support is awarded.
Reaching a reasonable settlement
Since gray divorce can pose a financial hardship on both spouses, it is essential for spouses to work toward a fair division of property and, if applicable, an appropriate spousal support order. Anyone preparing for a gray divorce in Virginia should considering discussing financial needs and legal rights with an attorney before the divorce proceedings begin.