Last year, a Pew Research article noted the serious rise in “gray” divorces, those involving couples who are 50 and older (the phrase is a bit derogatory, I’ll admit). The divorce rate for people over 50 has doubled since 1990, and for people over 65, the rate has tripled in that same time span. A primary factor in the increase of these separations is the aging of the “Baby Boomer” generation, which makes up a large percentage of the population
What sort of financial impact can a divorce this late in life have? According to a recent Washington Post article, the financial effects can be drastic, particularly on retirement accounts. For instance, in Alabama, a retirement account can be divided in a divorce if there have been at least 10 years of marriage. Not all divisions are 50/50 but having any significant portion of retirement funds ordered to be withdrawn from a 401(k) or IRA when someone is nearing retirement age, can be devastating; it can have the same financial impact as a person starting to save too late in life or not enough.
If a person over 65 is getting a divorce, there is a likelihood that this is the 2nd or 3rd divorce for them. If that is the case, then divided accounts, property, and other assets can also have a serious impact on that person’s estate and what they are able to leave to their children and grandchildren from prior relationships.
A critical way to avoid these sorts of problems is to enter into a prenuptial or post-nuptial agreement to protect certain assets and accounts from division in the event of divorce and to ensure that property and assets are properly preserved for children and grandchildren after death. Read our separate practice area page on prenuptial and postnuptial agreements for more information.