By Madelin Espino, CDRE®, CDS Court Appointed Certified Real Estate Expert
Grey divorce refers to the dissolution of a marriage involving couples who are age 50 or older. This phenomenon has become increasingly common, and its legal implications can differ significantly from those of divorces involving younger individuals. As life expectancy rises and societal norms evolve, more individuals in later stages of life are opting to end long-term marriages.
While the legal process of divorce remains similar, the considerations that judges and courts must account for in grey divorces are nuanced and can be more complex. In contrast to divorces of younger individuals, where the primary concerns are usually child custody, child support, and co-parenting, grey divorce often focuses on complex asset divisions, retirement and pension considerations, and issues regarding health care.
In this article, we will explore the judicial considerations that are paramount in grey divorce cases, outlining the factors that influence judicial decisions in these proceedings.
Asset Division and Property Settlement. One of the most prominent judicial considerations in grey divorce is the division of assets. In most jurisdictions, courts apply the principle of equitable distribution, which aims to divide property fairly, though not necessarily equally. The division of assets in grey divorce cases often involves significant and complex issues, such as:
Retirement Accounts and Pensions: Couples over 50 may have accumulated substantial retirement savings, such as pensions, 401(k) accounts, or individual retirement accounts (IRAs). Courts must carefully assess the value of these assets, as they will typically need to be divided between the parties. The division may involve creating a Qualified Domestic Relations Order (QDRO) to divide pensions or other retirement accounts. The timing of withdrawals and tax implications can also be critical considerations.
Real Estate: Homes and other real estate properties can be a significant source of disagreement. Given that many grey divorcees have lived in the same property for decades, it may hold substantial sentimental or emotional value, which can complicate the division and sale of marital real estate. This is where an experienced and court appointed Certified Divorce Real Estate Expert (CDRE®) is an invaluable resource to the divorcing couple, their counsel and the court.
Debts: In addition to assets, courts also assess marital debts. The division of debt may not be as straightforward as asset division, as there may be disagreements over who is responsible for particular liabilities, such as credit card debt, mortgages, or loans. In some cases, one party may be better positioned to pay off the debt due to their financial circumstances, which can influence how the court divides it.
Alimony and Spousal Support. Another critical judicial consideration in grey divorce is whether alimony will be awarded, and if so, in what amount. Older individuals may have been out of the workforce for extended periods due to raising children or managing household responsibilities. Consequently, one spouse may be financially dependent on the other.
Judges will assess a variety of factors when deciding on alimony, such as:
Duration of the Marriage: Long-term marriages are more likely to result in an award of alimony, particularly if one spouse is financially dependent on the other. The length of the marriage is a key factor in determining the fairness of an alimony award.
Age and Health: Judges must consider the age and health of both parties. If one spouse is in poor health or nearing retirement, this may influence the court’s decision regarding the amount and duration of alimony. In some cases, the spouse who is closer to retirement may be entitled to support for a longer duration to ensure financial stability in their later years.
Standard of Living: Courts will consider the standard of living the couple enjoyed during the marriage. This factor is often used to determine the amount of spousal support needed to allow the lower-earning spouse to maintain a similar lifestyle after the divorce.
Retirement and Future Financial Security. Retirement and the financial future of the parties are critical considerations in grey divorce cases. At an age where retirement is imminent or already occurring, divorcing individuals may have limited time to rebuild their financial security. Courts must consider:
Retirement Plans: A judge will need to assess the value of any pension plans, 401(k) accounts, or other retirement savings accumulated during the marriage and ensure that each party receives a fair portion of these assets.
Income After Divorce: A judge may also evaluate each party’s expected income after the divorce, considering factors such as Social Security benefits, and post-divorce employment prospects. This assessment helps determine the long-term financial viability of each individual, especially if one spouse has limited income potential due to age or health concerns.
Health Care Costs: As individuals age, health care becomes a critical issue. Courts may need to address how health care expenses will be handled post-divorce, particularly if one spouse is dependent on the other’s employer-provided health insurance. If one spouse is entitled to continued health care coverage under the other’s plan, this benefit could be a crucial consideration.
Emotional and Psychological Impact. While legal considerations are paramount in divorce proceedings, judges must also be mindful of the emotional and psychological toll that grey divorce can have on the individuals involved. Older individuals may face additional stressors related to aging, health concerns, and the loss of long-term companionship.
Judges may not directly intervene in these emotional matters, but they often take into account the potential impact on the parties’ mental and emotional well-being when determining matters such as the timing of the divorce and the allocation of assets or spousal support.
Tax Considerations. Divorces can have significant tax implications, particularly for older couples. The division of retirement accounts, real estate, and other assets may have tax consequences that judges must consider when finalizing a divorce settlement. For example, withdrawing funds from retirement accounts early can trigger penalties, while the sale of a marital home may result in capital gains tax. Courts must take these considerations into account to ensure that both parties are treated fairly and that neither party is unfairly burdened by the tax consequences of asset division.
Grey divorce presents a unique set of challenges for both divorcing couples and the courts. Given the growing prevalence of grey divorce, it is important for judges, attorneys, and individuals to carefully navigate the complex legal and financial issues that can arise in these cases.
It is my great privilege to serve our family law community in the State of Florida as a Court Appointed Certified Real Estate Expert, a designation earned by less than 1% of realtors nationwide. I have been court appointed as the designated realtor and special magistrate in numerous family law matters, and have over 20 years’ of experience as a realtor.
For more information concerning my credentials and experience, or to receive a complimentary copy of my book, Divorce Real Estate 101, I welcome you to visit my website www.madelinespino.com. Also, if you have a case that could benefit from my specialized divorce real estate services, feel free to contact me directly via email at madelin@madelinespino.com.
Thanks
Omar J. Arcia, Esq.
Law Office of Omar J. Arcia, P.A.
Huntington Square III
3350 S.W. 148th Avenue
Suite 110
Miramar, Florida 33027