Divorce is always a complex and emotional process for married Minnesota couples, but it can have significant financial implications when it occurs later in life. A gray divorce, which refers to a divorce that occurs when the couple is over the age of 50, can be especially challenging.
Division of assets
One of the most significant financial implications of a gray divorce is the division of assets. Couples who have been married for a long time have often accumulated significant assets, including retirement accounts, real estate and investments.
When a couple divorces, these assets must be divided, which can be complex and time-consuming. Depending on the state’s laws where the divorce occurs, the assets may be split equally, or one party may be entitled to a larger share.
Alimony and spousal support
One party may be entitled to alimony or spousal support in many gray divorces. This is especially true if one party was the primary breadwinner or if one party sacrificed their career to support the other spouse’s career. The amount of alimony or spousal support awarded will depend on various factors, including the length of the marriage, the earning potential of both parties and the standard of living established during the marriage.
Retirement accounts
Couples who have been married for a long time may have built up significant retirement savings, including 401(k) plans and IRAs. However, when a couple divorces, these assets may be split, impacting both parties’ retirement plans.
Health care costs
As people age, their healthcare costs tend to increase. For couples who have been together for a long time, one party may have been covered under the other spouse’s health insurance plan. When a couple divorces, the party covered under the other spouse’s plan may need to find their health insurance, which can be expensive.
Additionally, if one party has significant health issues, the cost of medical care can impact both parties’ finances.
Estate planning
Couples who have been married for a long time may have established significant estate plans, including wills and trusts. When a couple divorces, these plans may need to be updated to reflect the change in marital status. Furthermore, if one party dies, the other party may lose their right to inherit specific assets if they were not updated.
Ensuring financial stability after a gray divorce
Gray divorce can have significant financial implications. From the division of assets to retirement savings, health care costs and estate planning, there are many factors to consider. A plan is essential for rebuilding your financial stability after a gray divorce.