Challenges of a Gray Divorce

Divorce is hard at any stage of life. However, various aspects of divorce can be particularly challenging after the age of 50. By the time you are older, you have typically acquired more property and assets than you may have possessed at a younger age or before your career was established. While you may not have to be concerned with child custody and child support matters, you might face issues concerning health insurance or the division of your retirement account. Here are seven issues that can make the legal process challenging for older couples that should be carefully considered if you and your spouse are facing a gray divorce:

1. Identifying Marital Assets

Under California’s community property laws, only marital property is subject to division in divorce. Assets and debts acquired before you were married are considered separate property and belong to the original owner. However, when you’ve been married for many years, or even decades, it can be difficult to remember which assets you owned before the marriage. In gray divorce, it’s important to carefully take inventory of every belonging you own — including jewelry, art, furniture, bank accounts, and real estate — to determine whether it should be classified as marital or separate property.

2. Dividing Commingled Assets

Commingled property can make property division complicated in a gray divorce. In long-term marriages, it is common for separate assets to be mixed with marital assets. For instance, if one spouse brought a house into the marriage and marital funds were used to make repairs and renovations, the property would be “commingled,” making the process for division more complex.

3. Selling the Family Home

The most significant asset a married couple usually has is the marital home. But the decision to sell it isn’t only a financial one, but it can be an emotional one. If you are thinking about keeping the marital home, it’s crucial to consider whether you can afford any remaining mortgage and expenses related to repairs and maintenance. In some cases, selling the marital home and any other jointly owned property can help ensure your financial stability in the future.

4. Determining Alimony

In a gray divorce, a spouse who was financially dependent upon the other may not plan on going back to work due to their age. While alimony is typically awarded for a limited duration in order to allow a spouse to get back on their feet, the higher earning spouse in a gray divorce could potentially end up paying alimony for the rest of their lives. Critically, an alimony recipient is unlikely to become financially dependent after a long-term marriage. In addition, a spouse’s total compensation may be more complex than it was earlier in the marriage — things like bonuses, restricted stock units, executive compensation, and ownership stakes must all be taken into account when calculating alimony.

5. Considering Inheritances

While inheritances are considered separate property in divorce — which is not subject to division — couples often use their inheritances for the purpose of paying for a home, vehicle, or opening a joint bank account with their spouse. In such instances, the assets from the inheritance may be commingled with marital property and the court may consider it to be community property. Transmutation can also be an issue that arises where inheritances are concerned. For example, if you transferred your inheritance into both your name and your spouse’s name, the court would likely deem this to mean you had intended to convert the assets to marital property.

6. Dividing Retirement Accounts

In California, any income earned during the marriage is considered shared marital property that is divided when spouses part ways. Specifically, retirement accounts, pensions, 401(k)s, and defined contribution plans must all be considered. By later in life, a retirement account may be substantial — and it can be a significant asset in divorce. Dividing a retirement account is an intricate process that requires additional paperwork and a Qualified Domestic Relations Order. Pensions can be even more complicated, particularly when the spouse has not yet retired.

7. Health Insurance Issues

Not only does health insurance impact a spouse who is employed, but it also affects the spouse whose benefits are provided by the other. After your gray divorce has been finalized, the health insurance terminates for the spouse who was not employed. Not having health insurance can be a major concern, especially for older adults who may have pre-existing conditions. These issues must be carefully accounted for before signing a divorce settlement.

Contact an Experienced Fresno Gray Divorce Attorney

If you’re parting ways with your spouse later in life or after many years of marriage, it’s essential to be aware of the unique issues you might face. A knowledgeable divorce attorney can best advise you regarding your legal rights and options. With more than 20 years of experience, the Law Offices of Rick D. Banks provides clients with capable counsel and reliable representation for a wide variety of matrimonial matters, including gray divorces. To schedule a no obligation consultation, call (559) 222-4891.