Divorce is rarely easy, but for couples over 50 ending a long-term marriage—a trend often called “gray divorce”—the legal and financial challenges are unique. Unlike divorces earlier in life, these cases involve untangling lives that have been intertwined for decades, with complex issues centered on retirement, long-term security, and a future that may feel uncertain.

At LforLaw, we understand the specific nuances of gray divorce. Our goal is to help you navigate these issues with a strategy that protects your financial future and provides peace of mind.

The Complexities of Dividing Retirement Assets 💰

For couples in their 50s and 60s, a retirement account is often their most valuable asset. Dividing these assets—like 401(k)s, pensions, and IRAs—is one of the most critical aspects of a gray divorce.

• Pensions and 401(k)s: The portion of these accounts earned during the marriage is considered marital property, subject to division. This process requires a specialized court order known as a Qualified Domestic Relations Order (QDRO). The QDRO ensures that one spouse can receive their share of the other’s retirement account without incurring early withdrawal penalties or immediate tax liabilities. Without a QDRO, it’s impossible to transfer these funds legally.
• IRAs: Unlike pensions and 401(k)s, IRAs do not require a QDRO. The transfer can be done directly between custodians, but it must be explicitly defined as “transfer incident to divorce” to avoid taxes and penalties.

The financial decisions made during this phase will impact your lifestyle for the rest of your life. It is crucial to work with an attorney who understands these complex financial instruments to ensure your retirement savings are protected.

Spousal Support: A Different Calculation for Long-Term Marriages

In a gray divorce, spousal support (alimony) often takes on a greater significance. After a long marriage where one spouse may have prioritized raising a family over a career, courts often grant support for a longer duration, sometimes even for an indefinite period.

Judges will consider a variety of factors to determine the amount and duration of support, including:

• The length of the marriage.
• The age and health of both spouses.
• Each spouse’s ability to earn a living.
• The standard of living established during the marriage.

Given that one spouse may be unable to re-enter the workforce or earn a comparable salary, spousal support can be a vital lifeline. Your attorney will work to demonstrate your need for support or, if you’re the payor, ensure the amount is fair and sustainable.

Divorce & Social Security Benefits 📈

Many people are unaware that your divorce can have a direct impact on your Social Security benefits. If you were married for at least 10 years and are at least 62 years old, you may be eligible to receive a spousal benefit based on your ex-spouse’s earnings record.

Even if your ex-spouse has remarried, you can still collect a benefit based on their record, and it won’t reduce the amount they or their new spouse receive. This can be a significant advantage, especially for a spouse with a lower lifetime earning record. An experienced attorney can help ensure you meet all the eligibility criteria to claim this benefit.

Estate Planning and Other Considerations

A gray divorce doesn’t just impact your finances; it fundamentally changes your estate plan. It is a critical, and often overlooked, area that requires immediate attention.

• Update Your Will and Trust: Most states have laws that automatically revoke a spouse’s inheritance upon divorce, but it’s essential to create a new will that clearly reflects your wishes.
• Change Beneficiaries: Assets like retirement accounts, life insurance policies, and investment accounts are passed to the beneficiaries you name on the account. They do not pass through your will. Failing to update these can lead to your ex-spouse inheriting your wealth, regardless of what your new will says.
• Revise Powers of Attorney: Ensure your former spouse is no longer designated to make financial or medical decisions on your behalf.

Navigating these complex issues alone can lead to costly mistakes. The decisions made during a gray divorce will shape your financial reality for decades to come. An attorney who specializes in this area can provide the strategic guidance needed to protect your assets and secure your future.

At LforLaw, we are dedicated to helping clients over 50 navigate the unique challenges of divorce with confidence. Contact us today for a confidential consultation to discuss your specific situation and plan for a secure future.