Going through Divorce Later in Life Poses Different Economic Challenges
As many people in Louisiana have learned firsthand, divorce can pose a significant financial hardship, between the cost of completing the separation and the increased expenses that come with living independently. This is true at any age, but it is especially notable when couples decide to divorce later in life, a phenomena that is often referred to as “gray divorce.”
Research shows that a growing number of couples are making this decision. The divorce rate among people older than 50 doubled from 1990 to 2010, when one-quarter of all divorced couples belonged to that age group, according to USA Today. Unfortunately, married couples in Louisiana who untie the knot and join the growing population of gray divorcees may face serious economic difficulties.
Unavoidable Financial Challenges
Even if an older couple can approach divorce in a fair and cooperative manner, certain financial issues are inevitable. According to USA Today, the following factors can strain couples financially:
- Older couples simply have fewer working years to recover from the divorce and start rebuilding their assets.
- Spouses must adjust their budgets to accommodate two retirements that will occur in the near future.
- Funding two retirements can cost as much as 30 to 50 percent more than funding one shared retirement.
After a gray divorce, many older people may need to resume working, delay retiring, downgrade their planned retirements or reduce the amount of support or inheritance they provide to their children.
Many older couples benefit from hiring a financial advisor before completing a gray divorce. With the help of an advisor, couples can evaluate the expenses of living or retiring independently, and they can determine whether keeping certain assets, such as the family home, is even a reasonable option for either spouse.
Careful planning can help spouses transition past a divorce late in life. Still, even with a fair settlement, both spouses will face challenges. An unfair settlement can leave spouses exposed to unfavorable outcomes and long-term financial struggles.
In a contentious or high-conflict gray divorce, it is critical that spouses protect their rights to marital property and other support. Louisiana follows community property laws, so assets and debts obtained during the marriage are divided equally between both spouses. These assets include complex assets, such as retirement, investment and insurance accounts.
Older couples often have accumulated substantial amounts of complex assets, according to the New York Times. Unfortunately, many people have a poor understanding of their legal rights to these assets during a divorce. This makes seeking legal help when dividing complex assets crucial.
Divorcing spouses in Louisiana may also be entitled to spousal support. With state law requiring an equal division of property, this form of support can be crucial for economically disadvantaged spouses who gave up work opportunities to support the marriage. This is especially true for older spouses, who may struggle to re-enter the workforce and find employment yielding adequate income.
Anyone preparing for a gray divorce should also meet with an experienced lawyer. An attorney can help a divorcing spouse understand his or her legal rights and improve the likelihood of a fair settlement that will allow the spouse to meet the challenges of living alone, recovering financially and retiring independently.