As explained by Insider, a gray divorce refers to couples 50 and older ending their marriages. These divorces are more difficult because people usually have more complicated financial situations at this point in their lives.
For instance, intermingled finances make it hard to determine the difference between shared and separate assets. Because gray divorces are often more complex, it helps to keep the following points in mind.
Long marriages where one spouse was the primary homemaker and the other was the breadwinner usually result in alimony payments. The stay-at-home parent or spouse may lack essential job skills and training from being away from the workforce for so long. This can result in difficulty securing gainful employment, which means they require alimony payments to maintain the same standard of living.
Dividing retirement benefits is often challenging during gray divorces. Even if the court agrees a spouse should receive a portion of their ex’s retirement benefits, there are usually challenges regarding how to distribute these assets. For example, some retirement accounts charge early withdrawal fees, which means penalties apply to the account holder for removing assets to provide to their former spouse.
Financial powers of attorney
Incapacity is a concern as a person grows older. That is why older couples should have a financial power of attorney in place, which is a person who will oversee their finances in the event they are unable to. If your spouse is your power of attorney, you must select another party upon your divorce. You can choose a relative, a friend, or a professional, such as an attorney or accountant.
Some couples opt for a postnuptial agreement if a prenuptial agreement is not in place. A postnup works similarly, only it occurs after you are already married. They can benefit older couples in the event there is trouble in the marriage or a dispute about finances.