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How to Protect Your Assets in a Grey Divorce

by Debra Schoenberg

Grey divorce refers to the split or separation of older couples, usually over the age of 50, who have been in a long-term marriage and maybe going through retirement. According to Forbes, divorce for older couples has increased, while the overall rate of divorce in the U.S. has declined.

There are many reasons why people choose to divorce at an older age, including financial management issues, infidelity, retirement and simply growing apart. Spouses who are looking to divorce at a later stage in life should seek professional help to learn how to protect their assets. When couples divorce later in life, they have fewer opportunities to make up for the financial losses that result from a divorce. Knowing how to manage it can reduce the stress of a divorce.

Older divorcing spouses should understand the process of claiming their Social Security benefits during the process of separating because not all divorced couples are eligible to receive benefits. According to the Social Security Administration, a couple must be married for at least 10 years before one of the divorcing spouses can claim benefits based on the other’s earning record. To retain the benefits, the person claiming them must remain unmarried and be at least 62 years old. If that person decides to remarry, they will not be able to collect benefits based on their former spouse’s earnings record unless that marriage ends as well. Lastly, it’s important to note that if you’re already receiving more in Social Security benefits than your spouse, you may not be eligible for any additional monthly compensation.

Property division may be one of the most asked questions in a grey divorce, and understanding state law will help you understand the process moving forward. California is a community property state which means that any property or debts acquired by one and/or both spouses during the marriage belong equally to both parties. California’s community property division laws may not be ideal for all couples. Dividing up homes, businesses, bank accounts, pensions, retirement accounts and debts in half could be unfair for one or both spouses. If one spouse worked hard to accumulate assets while the other did not, the working spouse may wish for an arrangement other than a 50/50 division. It is possible to avoid California’s community property laws during a divorce case, if both spouses are able to agree upon the terms of the divorce.

If you were covered under your spouse’s health insurance, divorce can create another issue to deal with. Medicare is a health insurance plan offered to people who are 65 and older and have worked for at least 10 years. If you didn’t work enough to qualify, you may be eligible to receive benefits based on your former spouse’s record. To qualify, you must have been married for at least 10 years and remain unmarried to continue receiving benefits. If you are not 65 or older and can’t qualify for Medicare, you should consider the costs of insurance when addressing the financial matters in the divorce. If you are still employed, you might be able to obtain insurance through your employer, and if that’s not possible, you may want to explore other options.

Divorce is stressful enough, and fighting over property and benefits at that stage of life may impact your health and happiness. The consequences of divorce could be different for an elderly couple, compared to a younger couple who has more time to recover financially and emotionally from a divorce. An older divorcee may have a hard time reentering the workforce, rebuilding their savings and finding a new life partner. Seeking legal help will guide you through the process ad assist you in making the best decisions.