Why Grey Divorce Impacts Finances

The divorce rate among those over 50 is rapidly increasing, so much so that it’s been given it’s own title – Grey Divorce. And while divorce rates in this age group climb, the impact upon their own lives and their adult children’s lives continue to be felt. Adult children report feeling the same sense of sorrow when learning of their parent’s divorce as younger children, while the couple that has split must now face retirement with half the assets they once had.

The divorce rate among couples 50 and older has soared. The number of individuals who are adults when their parents divorce is climbing with it. Yet the vast majority of recent research, and subsequent counseling, for divorcing couples is focused on young children. But for adult children of divorce, specific therapy may be helpful in coming to terms with their parents’ divorce.

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When Krista Mischo’s parents divorced after 45 years of marriage, she sought comfort from others in her situation. “I went to a divorce care group, but it was a meeting for adults going through divorces,” said Mrs. Mischo, who lives in Wisconsin and was 43 at the time. “The only group for children of divorce I could find was for young children.”

The effect on adult children is undocumented, said Susan L. Brown, a sociology professor at Bowling Green State University, whose 2012 study with I-Fen Lin, “The Gray Divorce Revolution,” established that the divorce rate among people 50 and older had doubled in the previous 20 years.

“I don’t know how it will play out,” Dr. Brown said of her findings. “For most people getting a gray divorce, the children are adult age.” But, she said, research “actually applies to a past generation. Where is the research that will help this generation?”

grey divorceAdult children are already trying to figure out the logistics of their parents’ grey divorce: they may feel their loyalties are painfully divided. They may feel pressure to visit more often to support the more emotionally struggling parent. Getting dragged into teary midnight phone calls, contentious conversations about whose fault the divorce was and even recounting new relationships makes a difficult situation unbearable. Worse, many adult children begin to question whether they want children of their own, or if they have the ability to maintain a healthy relationship.

Grey Divorce Is Soaring in Australia

Grey divorce has escalated across Australia with latest Australian Bureau of Statistics data showing the average age of divorcees has increased over the past 25 years. In 2013, the average female divorcee was 42 years old while the average male divorcee was 44. This compares to 32 for women and 34 for men in 1990. While the divorce rate for people in their 30s and 40s has decreased, it has jumped for those 50 and older.

Social researcher Mark McCrindle says the trend is in line with the increasing age of brides and grooms.
“We’ve seen the average age of marriage get later and people divorcing later,” he says. “There’s a couple of other factors in addition to people getting married later, including people living longer, changing careers later in life and being more active later in life. Once upon a time, people would have said ‘I’ll stick it out’, but not any more.”

Women have to be especially careful. The average Australian woman will live five years longer than a man but has a superannuation balance that’s 43 per cent lower. So dividing the family assets fairly in a split is important to maintaining quality of life.

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Some women may not have a complete picture of the family finances, particularly if they’ve left the workforce to focus on raising children. Both men and women need to be fully informed about all aspects of their financial relationship – bank accounts, investments and insurance. They should also now where all the important documents are kept.

The best thing you can do is seek legal advice. There are no hard and fast rules about who gets what assets in the event of a divorce. Individual circumstances will dictate how assets are split, and getting an objective and experienced opinion is likely to save you stress down the track.

The question the law looks at is one of contribution. Which spouse has contributed more to the relationship? It is common for the spouse who has worked for the majority of the relationship to assume that their financial contribution is worth the most. But what is the weight given to the role of parent and homemaker in a long marriage after separation and when the children have left home?

divorce houseThe position of the law is that the contributions of both parties over a lengthy period are substantial and significant. The parent and homemaker’s contributions to the welfare of the family are in themselves significant contributions and the law does not suggest that one kind of contribution should be treated as less important or valuable than another.

One of the most important considerations will be what to do with the family home and any investment properties. While it may seem like a great idea for one partner to keep the house, consider the ongoing maintenance fees and the fact it ties up money in an illiquid asset. If the spouse who remains in the house isn’t earning an income, they may find the house to be a heavy financial burden.

For a couple seeking a grey divorce that is asset rich but cash poor, a good option can be to sell the house and split the proceeds.

We offer a free, 10-minute phone consultation with one of our friendly and experienced family lawyers. Contact us today!