Gray divorces involve couples 50 and older who decide to end their marriages. While most people think long-term marriages are the strongest, many older couples experience the same sort of problems as younger ones.
When it comes to issues during gray divorce, they tend to be more complicated the longer a marriage lasts. Here are some things to expect during the process, so you can make a solid plan for navigating them.
Social Security benefits
Former spouses can sometimes receive benefits from their ex’s Social Security funds. In this case, you must develop a plan for receiving benefits, one that incurs the fewest number of penalties and red tape. You may also consider if it makes sense to draw benefits from you or your ex-spouse’s account, which typically depends on who earned more during the course of your work history.
Many gray divorces entail some kind of alimony payment, particularly when one spouse was a stay-at-home parent. In terms of taxes, the ex who is receiving the alimony payment must pay taxes on it, as it is a form of income. It is worth considering these tax implications during the divorce to ensure they make sense when it comes to your financial status going forward.
Most long-term couples have numerous shared assets, such as houses, vehicles, and more. Dividing these assets is often complex, especially when it comes to retirement plans and life insurance policies. Accordingly, prepare for extensive negotiations when it comes to assets and try to remain flexible to ensure all parties experience a fair outcome.
Once the divorce is final, you will need to review and update your estate plan to ensure your spouse is not a factor. Failing to update your estate plan can result in many serious issues after your death, especially among your desired heirs.
In addition to reviewing wills and trusts, make sure you examine your beneficiary designations. These designations ensure processes from life insurance policies and retirement accounts go to the right person.