In addition to the legal issues which are presented in a grey divorce, it is important for divorcing spouses in this age group to reach out to other professional advisors to ensure their financial future and increasing health issues are addressed. In the grey divorce, due to increasing age, often declining health, loss of income due to retirement or disability and statistically the greater chance of death, the issues are especially immediate. Therefore, engaging a good team of professionals as soon as possible is critical. While the following professionals should be consulted in any divorce, regardless of age, the issues are more acute in the grey divorce.
Everyone’s estate plan should be reviewed periodically, but especially during and after a divorce. It is important for two reasons: first, to ensure that property will be transferred to the desired person, charity or institution upon death; second, to review tax planning in light of one’s age, health and wealth after divorce. A very important consideration during a divorce is to review and update Advance Heath Care Directives and Powers of Attorney. Because spouses in a grey divorce often have failing health, it is important that a trusted person will make critical decisions in the event of hospitalization or incapacity of either divorced spouse.
A dependent spouse on a health insurance policy will lose his or her health insurance upon divorce. For the spouse who will be removed from the insurance policy, it may be difficult and potentially impossible to obtain health insurance due to age, health and pre-existing conditions. Therefore, long-term care insurance must be considered as a possible alternative to make sure that some benefits toward in-home or residential care can be accessed. Long-term care insurance should also be considered even when health insurance is available because it is a different benefit than health insurance and is typically a small expense as compared to the cost of home or residential care later in life.
For many people over the age of 50, retirement planning is in process and maybe even right on target until the time a divorce occurs. The money saved by the couple is now going to have to support two separate households, often as income is decreasing. It is critical to consult with a financial advisor to re-evaluate the retirement financial plan for each person individually in light of the division of assets and the payment or receipt of spousal support.
An accountant’s advice likely will impact the estate plan, insurance decisions and the financial plan. It should be part of the decision-making process throughout the divorce and after the divorce. The accountant can assess the division of assets negotiated in the divorce to maximize tax benefits, explain fully the tax effect of any potential settlement, and advise how estate taxes will impact each party’s financial situations upon death.
Family Law Attorneys and Mediators
Grey divorce involves complex financial issues and difficult financial choices. It may be tempting for the two parties in grey divorce, either of whom may be experiencing difficult financial circumstances or may fear such circumstances in the future, to proceed without legal representation. However, to make such a choice means struggling with the complexities of the laws and the legal system and likely will produce an undesirable outcome.
Going through a divorce takes a big emotional toll, but proceeding with a divorce without any legal guidance may lead to adverse consequences which possibly may not or cannot be reversed. To be the most economical about spending attorney’s fees, both parties must work very hard to put aside their emotions and work together, with the assistance of a mediator or with cooperative attorneys, to help them to resolve their financial and custodial issues in an economical and legally proper way. Yes, this costs some money, but the cost is no doubt a fraction of the money that is spent in an adversarial situation.
Grey divorce requires cooperation in a spirit of partnership that once made the marriage viable. Working cooperatively is the best way to maximize outcomes and minimize the negatives, so that each of the parties to the grey divorce can move past the pain and get on with their lives for a better future.
Marlo Van Oorschot is a respected Los Angeles-based family law attorney who for nearly 20 years has focused her practice on resolving divorce, child custody, child and spousal support and property disputes. She is the founding and managing partner of Law Offices of Marlo Van Oorschot, APLC. This article has been adapted with permission from: How to Survive Grey Divorce: What You Need to Know About Divorce After 50.