The divorce rate in the U.S. has declined 29% from its high point in 1979. As a society, this is something we should all celebrate. One disturbing trend, however, is that the divorce rate for those over the age of 55 is on the rise. Yes, you read that right. In the last 40 years, the divorce rate for those over 55 has climbed from 5 in every 1,000 marriages to 15 in every 1,000 marriages. Divorce amongst this group has become so prevalent that it has not one but three common names: gray divorce, silver splitter, and diamond divorce.
Divorce is considered the second most stressful life event behind the death of a spouse or a loved one. This makes sense because divorce is the “death” of a union that was intended to last a lifetime. Divorce impacts the financial, emotional, and familial aspects of life. So, what does one need to be aware of if faced with a divorce after 55?
The first recommendation I would offer is to look on the bright side. I see the following as being positives and reasons to remain hopeful if you do find yourself divorcing later in life.
- After age 55 the bulk of one’s asset accumulation is done – which can provide for a more equitable lifestyle going forward as individuals,
- Typically children are older, if not already out of the home, which can help with the transition, and
- This age bracket tends to have more free time to travel and pursue leisure activities that can help provide fulfillment and happiness.
The second recommendation I would offer is to assemble a team of professionals to assist you in this transition. This team should include an attorney, a tax professional, and a financial adviser or Certified Divorce Financial Analyst.
Going through a divorce requires a lot of preparation. This includes creating an inventory of assets and analyzing how they are titled, their assigned value, their tax implications, their income generating ability, and their beneficiary designation. For those over 55, it is also essential to assess and determine the value of things that are not currently listed on your balance sheet, which include health insurance, social security, pensions and stock options. Your team will need to coordinate with one another to determine what is most important for you and your future financial plan. Once your divorce is final, you will be able to implement your new plan which may include filing a tax return as an individual for the first time in a long time, crafting new estate documents with a new financial and medical power of attorney, and working with a financial adviser as an individual as opposed to a couple.
No one wants to go through a divorce at any age. But by assembling a team of professionals to help you through the process, you can rest assured that you will not be alone and will have the experience of others by your side every step of the way.