“Silver divorce” (or “gray divorce”) is a term used to categorize dissolutions of marriage between couples that are older than 50, have no minor children, and generally involve long-term marriages. Sometimes known as “silver splitters” or “diamond divorces,” these categorizations refer to the increasing trend of late-in-life divorces.
Divorce is complicated and painful for everyone. But getting divorced late in life can provide a unique set of difficulties. A gray divorce is unique, not only because of the length of marriage and age of the couple, but issues frequently arise in the following categories:
Many times, finances are the only topic at issue in a gray divorce. The parties are “empty nesters” (have no minor children in the marital home) so issues of parental fitness, child support, parenting time and custody are non-existent. Also, gray divorces tend to involve higher assets than other divorces because the parties have spent their lifetime acquiring property and investments.
Arizona is a “community property” state. This means that assets and debts are owned equally between the parties. Absent special circumstances, courts will generally split assets of the marriage between the parties.
Many times, the largest asset a couple has is their marital home. Options exist for the parties to sell the home and split the proceeds. Also, one spouse may retain the marital home, but then have to “buy out” the other spouse.
Retirement accounts that are earned during the course of the marriage are considered community property and will be divided as such. Parties are always free to agree to an unequal division, but absent agreement, the financial and investment accounts are generally split between the parties. When the division of retirement accounts is required, a QDRO (Qualified Domestic Relations Order) is used. Simonds Law Group, PLLC hires the top experts dedicated to this specific area of law to assist in the investment account division. If the parties have multiple accounts that are of equal value and depending on each spouse’s financial goals, it’s possible to award each spouse a specific account thereby eliminating the need for individual division of financial accounts.
In Arizona, inheritances are sole and separate property. This is an exception to the general “community property” rule. However, if a spouse receiving the inheritance is not careful and does not take specific precautions, the sole and separate inheritance can easily be converted into community property.
Common mechanisms that protect inheritances from becoming community property include keeping the money in a separate account the other spouse does not have access to and executing a post-nuptial agreement.
Inheritances are at risk of becoming community property when the funds become comingled. Commonly, commingling occurs when an inheritance is combined with other marital accounts, used to make purchases during the marriage, take vacations, purchase tangible property, or transfer to a community account. The court will consider these purchases as a community and not distinguish which assets or expenditures were made with the inherited funds.
The purpose of spousal maintenance (commonly referred to as alimony outside of Arizona) is designed to provide a spouse with a marital standard of living. The marital standard of living is the lifestyle enjoyed by the parties during the marriage.
In Arizona, spousal maintenance is an order for one spouse to pay a certain amount of money each month to the other for their support. Spousal maintenance can be ordered for many months or years following a divorce. Generally, maintenance orders do not continue forever. However, the area of gray divorces presents one of the most frequent situations for a perpetual spousal maintenance order.
The issue of spousal maintenance is not black and white and is very nuanced. There are many factors a court must consider when making a determination of spousal maintenance: the duration of the marriage, age of the parties, if a spouse can provide for their own needs, and if they can obtain employment are all considered when considering if spousal maintenance is appropriate.
Following a divorce, one spouse may become eligible to receive their former spouse’s social security benefits. This can occur when the drawing spouse is at least 62 years old and the marriage has lasted 10 or more years. Also, the benefit from social security must be more than what the drawing spouse would receive from their own social security earnings.
Divorce will impact your health insurance. One party frequently provides health insurance for the marriage.
Until the divorce is finalized, the party providing (and paying for) the health coverage cannot generally remove the other party from the health benefits. When the divorce is finalized, each party is responsible for their own health insurance. This can be a complication for parties living on a fixed income.
If this is the situation, sometimes parties pursue a legal separation instead of divorce. A legal separation will provide the parties with court orders regarding financial accounts, but the parties remain married for health insurance purposes only. Legal separation is rarely encouraged. But for couples with a history of health issues that want to be separated, a legal separation can provide the solution for health insurance issues.
At Simonds Law Group, PLLC, we have great respect for clients seeking divorce late in life. We are compassionate and supportive about the issues that lead clients to seek a “gray divorce.” Importantly, we are experienced and ready to address and help you resolve the issues associated with late-in-life divorces.
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