Pennsylvania couples who have accrued vast assets, shored up their retirement savings and are planning for a prosperous future as they age might be blindsided by a divorce. Divorces between those 50 and older are frequently categorized as “gray” divorces and pose unique challenges, especially for people of relative affluence. Long-term plans and strategies can be thrown into upheaval by such a dramatic life change. As the process moves forward, it is useful to consider common issues that arise in these circumstances.
Property division in a gray divorce can be complicated
People might feel overwhelmed as they strive to navigate the complex terrain of a gray divorce. Finances and how to split property will likely be a priority. Among the most frequent financial topics in a gray divorce are Social Security benefits and property division. With Social Security, a person whose work history entitles them to Social Security benefits will be obligated to share those benefits with the former spouse if the marriage lasted for at least 10 years; the other spouse did not remarry and is 62 or older; and the amount the person receives surpasses what the receiving spouse would get based on their own work history.
Separate property and marital property is also a frequent point of contention. Since Pennsylvania is an equitable distribution state, the property accumulated during the marriage will be split in a way the court deems as “fair.” That does not necessarily mean equal. If, for example, a person owned a business before the marriage but it improved significantly during the marriage due to contributions by both spouses, then that increase in value might be viewed as marital property and shared accordingly.
A high-asset gray divorce likely requires experienced assistance from the start
Divorce has declined in general over the past three decades. However, people 50 and older is one demographic that has seen an increase in divorce. There are many explanations for it including longer life spans and the desire to escape an unhappy situation. A high-asset divorce has unique challenges. It can upend retirement plans and force people to cut back at a time when they wanted to share their good fortune with children and grandchildren. Spousal support could be a concern as a person could be lacking the experience and skills to self-support in the same lifestyle they enjoyed during the marriage. For these and other factors, it is beneficial to have experienced guidance from the outset to ensure these concerns are resolved fairly.