The New Reality of Grey Divorce: A Guide
Changing Perceptions of Divorce
The picture of long marriages ending only in the “golden years” is no longer the norm. In the past, divorce was a taboo subject. However, with shifting societal norms, divorce’s stigma has faded, particularly among younger generations like Millennials and Gen Xers. The divorce rate, especially among couples aged 65 and older, has reached an all-time high, making grey divorce a trending topic.
Legal and Logistical Issues in Grey Divorce
Every divorcing couple must navigate legal and logistical issues, but older couples may encounter more complexities. Grey divorce may present unique challenges like dealing with adult children’s education or reassessing retirement plans. So, if you are contemplating a grey divorce, here are some questions you should consider.
Post Secondary Expenses and Family Dynamics
Grey divorce often involves empty nesters, and families formed later in life. Many older couples today are building families well into their 40s and 50s. Consequently, they face different financial challenges, like funding their children’s education.
As a divorcing parent, you’ll need to go beyond the basics regarding post-secondary expenses. Are tuition costs limited to four years? Is studying abroad an option? These concerns can impact your overall financial planning and may push back your retirement age.
Retirement Planning and Financial Challenges
Divorcing later in life often means reevaluating your retirement plans. If no prenuptial agreement exists, you might find yourself dividing pension plans and other benefits. This shift can affect your retirement age, especially if you’re also managing college expenses for your children.
Canada Pension Plan benefits can be a lifeline in these scenarios. Being aware of these benefits can be invaluable based on either your or your spouse’s work history.
Economic Factors and Asset Division
The state of the economy can influence your divorce and retirement plans. Inflation and other economic variables can affect your retirement accounts and overall savings. This makes asset division in grey divorce even more critical, especially if either spouse struggles with financial stability.
Unique Family Situations in Grey Divorce
Family dynamics in grey divorce can vary greatly. Whether you have a significant age gap with your spouse, a blended family, or children of various ages, each situation will bring challenges and considerations.
If you’re the primary earner, you may be concerned about how much of your income will be divided. On the other hand, if you’re a non-earning spouse, immediate access to funds is likely a priority.
Looking Ahead
As you consider your next steps, focus on your long-term goals. Whether you’re close to retirement or anticipating an inheritance, knowing your financial needs for the future will guide your decisions now.
Table of Contents
- Changing Perceptions of Divorce
- 3 Reasons Why Grey Divorce is on the raise
- Grey Divorce – Talking about money
- Issues That Must Be Considered When Facing A Grey Divorce:
- MAINTAINING YOUR FINANCIAL STABILITY
- HOLDING ONTO BUSINESS ASSETS
- YOUR RETIREMENT PLANNING
- ARRANGING YOUR INSURANCE
- LIVING WITHIN YOUR MEANS
- KEEPING YOUR FRIENDSHIPS GOING
- Final Thoughts
- At DTSW
- Have a Question or two about a Soft Landing?
3 Reasons Why Grey Divorce is on the raise
There is no single reason to explain the rise in grey divorces. Instead, it can attributed to three main factors:
- Divorce has become more socially acceptable
- People are living longer
- Many women have become more financially autonomous
Grey Divorce – Talking about money
To begin, it’s important to note that the legal process for a “grey divorce” is no different from any other divorce process. However, typically, marriages that have endured for a significant duration often follow traditional roles.
This usually involves one partner, often the husband, being the primary income-earner and managing the household budget. When such long-standing marriages experience a breakdown, it’s usually the wife who faces the most substantial financial challenges. This is often due to the wife having taken a hiatus from the workforce to raise children, thus requiring more financial advice and assistance post-divorce.
This is why much of the information in this article is directed towards women navigating a grey divorce. Another unique aspect of a grey divorce is the likely presence of a wide array of assets and issues due to the long-term nature of the marriage.
This may include shared property and businesses. Other factors that need consideration include:
- Pensions
- Estate planning
- Beneficiaries of wills and insurance policies
- Corporate shares related to the family business
- Use and ownership of properties
Issues That Must Be Considered When Facing A Grey Divorce:
MAINTAINING YOUR FINANCIAL STABILITY
Obviously, your financial situation will change post divorce. It makes sense to work with a divorce mediator to help you budget in the short and long term and ensure your financial stability going forward. You’ll need to know how much you need to save and how much you’re going to have to spend.
HOLDING ONTO BUSINESS ASSETS
If you’re married and self-employed and want to protect your business, hopefully you have already ‘divorce proofed’ your business. If not, an lawyer may be able to help. Otherwise, you will need the skills and insights of finance professionals to protect your assets in the event of a grey divorce. This is because if you’ve built your business while married, your business can be regarded as ‘family assets’.
If this is the case, you need to consider your options, namely:
- Buying out your spouse’s share
- Liquidating assets to pay your spouse (if the business forms the lion’s share of your marital assets)
- Selling the business and dividing the proceeds
It’s clear that with such big decisions to make, the advice of a financial professional at this stage could be worth its weight in gold.
YOUR RETIREMENT PLANNING
During grey divorce proceedings, your retirement and pension funds and those of your spouse will be analysed. LIF, RRIFs, LIRA and RRSP will all be included. Your separation agreement requires that you make it clear who owns each asset and how they will be redistributed.
ARRANGING YOUR INSURANCE
Who’s going to pay for health insurance, life insurance, vehicle insurance, buildings and contents insurance, after you get your grey divorce? If your spouse pays everything now, you need to prepare for the responsibility to fall on your shoulders once your grey divorce is finalized. It’s a good move to find out now how much each premium is going to cost you so you can budget for it.
LIVING WITHIN YOUR MEANS
Lifestyle changes are almost inevitable once you’re divorced and can no longer rely on your spouse’s income and support. This means things you’ve taken for granted – like your cable TV package, or shopping sprees or regular meet-ups with friends – might have to be cut back to take into account the new reality of your financial situation. Having a finance professional to help you understand what you can and can’t afford after a grey divorce will be crucial.
KEEPING YOUR FRIENDSHIPS GOING
Final Thoughts
Over the past 20 years, the term “grey divorce” has steadily emerged from the shadows, becoming an essential part of the dialogue surrounding marriage, family, and divorce. While the stigma surrounding divorce has generally lessened in society, older couples may still face unique challenges when deciding to part ways.
Whether it’s logistical issues related to dividing pension plans and Canada Pension Plan benefits or emotional difficulties tied to long marriages and grown children, every divorcing couple should weigh the pros and cons before making such a monumental decision.
The grey divorce revolution is partly attributed to a shift in societal norms. As people live longer and healthier lives, couples who have been together for 40 years or more may want something different. Sometimes, older couples may argue over financial challenges like distributing marital funds.
Even if either party feels the relationship lacks spontaneity, making a couple’s relationship feel predictable, it’s essential to think carefully before leaping. The age factor can complicate things further, especially for those around or past age 65. The concerns are many, from dividing retirement accounts and life insurance policies to considering Old Age Security and other health insurance coverage. This is especially true if either party suffers from health-related issues, such as chronic illness, that require ongoing medical attention.
Often preoccupied with their own lives, adult children may have difficulty understanding why their parents are growing apart and might even feel the ripple effects of what’s colloquially known as “empty nest syndrome.” Assistance from a Certifed Divorce Financial Analyst or other specialists becomes crucial to navigating the complicated legal terrain. Research suggests that the financial aftermath can be challenging for women, while men may face unique emotional battles.
Grey divorcees also have to consider the impact on insurance coverage, among other financial aspects. Furthermore, the emotional toll of getting divorced after such a long time can be monumental, often leading to reevaluating one’s life and plans.
Though grey divorce may present an opportunity for new beginnings and a fresh outlook on life, it’s not a step to be taken lightly. With every consideration, from the logistical to the legal, from the financial to the familial, the decision to divorce later in life is a complex one that deserves careful thought and professional guidance.
At DTSW
You’re here because you’re facing an incredibly complex and emotional decision—divorce. Whether you are part of the growing trend of grey divorce or going through this challenging experience at any stage, our Family Mediators and Certified Divorce Financial Analysts at DTSW fully understand what you are up against. For the past 20 years, we’ve been helping people like you navigate divorce’s logistical and financial challenges.
Older couples may need help with unique issues, such as dividing pension plans, dealing with Canada Pension Plan benefits, and understanding Old Age Security. You may have been married for a long time and have grown children impacted by this life-changing event. Emotions can run high, especially when spouses struggle with other complicating factors like substance abuse, which may waste marital funds.
Our Soft Landing Divorce Settlement Method offers a streamlined approach to tackling every aspect of divorce, whether emotional or financial. We guide you in a sensitive yet straightforward manner, ensuring the process is as stress-free as possible. We aim to make every divorcing couple feel secure and confident about their future, sidestepping the excessive conflicts, confusion, and costs often associated with divorce.
While some couples may argue about who gets what or even find their relationship feel predictable, our method places your needs at the forefront, whether related to life insurance policies, health insurance coverage, or retirement accounts. Our team can handle it all while you focus on what you want for your next chapter in life.
If either party feels that the relationship lacks spontaneity or that you’ve grown apart due to empty nest syndrome, now might be the time to weigh the idea of a new start. A grey divorce may offer an opportunity for a fresh start, a chance to live life on your terms. We’re here to help you make that transition as smooth as possible.
Schedule a Get Acquainted Call
Ready to take the first step toward a new beginning? We invite you to Schedule a Get Acquainted Call with our expert team. Let us guide this complex journey, ensuring a soft landing for you and your family.
Tap here is Schedule a Get Acquainted Call
Have a Question or two about a Soft Landing?
Ken Maynard CDFA, Acc.FM
I assist intelligent and successful couples in crafting rapid, custom separation agreements that pave the way for a smooth transition towards a secure future. This efficient process is achieved in about four meetings, effectively sidestepping the excessive conflicts, confusion, and costs commonly linked to legal proceedings. Clients have the flexibility to collaborate with me either via video conference or in-person through a DTSW associate at any of our six Greater Toronto mediation centers, located in Aurora, Barrie, North York, Vaughan, Mississauga, and Scarborough.
Have a few questions - Tap here to Schedule a Get Acquainted Call
-
Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/May 23, 2023
-
Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/June 2, 2022
-
Ken Maynard CDFA, Acc.FMhttps://divorcethesmartway.ca/author/wardman/May 20, 2022