“Gray divorce” refers to divorces occurring among long-married couples who are aged 50 or older. While gray divorces happen for all kinds of reasons, the one thing that they typically all have in common is complicated financial circumstances.
In Virginia, marital assets and debts are divided equitably in all divorces, not necessarily equally. That means the court aims to divide a marital estate between the members of a divorcing couple who is litigating their situation as fairly as possible, given their age, health, earnings capacity and the contributions they’ve made to the marriage (among other things) over the years.
Common financial concerns in gray divorces
Some of the most pressing financial concerns in a gray divorce include:
- Retirement funds: Savings that were initially intended to support a couple’s joint retirement may need to be divided, which will generally reduce the overall funds available to both spouses in their golden years. One spouse may also need a Qualified Domestic Relations Order (QDRO) to establish their right as an alternate payee for some portion of the other spouse’s pension.
- Social Security benefits: Social Security can be an essential source of income for retirees. If the marriage lasted for at least ten years, the lower-earning spouse may be entitled to claim Social Security benefits based on the ex-spouse’s work record, but it’s essential to understand the rules regarding eligibility in order to make plans.
- Health insurance: This can be a serious issue, especially as the parties age and have increased healthcare needs. Both parties need to understand their health insurance options post-divorce, whether that means looking at the cost of individual plans or benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA), as well as Medicare, and factoring the covered benefits and that expense into the overall financial picture.
- Spousal support: While spousal support (or “alimony”) is far from a given these days, it is most likely to be awarded to a dependent spouse when a long-standing marriage ends, particularly if the couple had traditional gender roles.
It’s important to seek legal guidance during a gray divorce. A professional can help spouses navigate the complexities of property division, retirement accounts and other financial matters, which can minimize the overall negative impact of the divorce process.