Getting divorced at any age can be a daunting and traumatic experience but for older couples a divorce can come with its own unique challenges. While divorce rates are generally on the decline, older couples in their 50s and over are bucking this trend.
There are several reasons for the so called “grey divorce”. A divorce could be the result of a mid-life crisis or the empty nest syndrome. By the time couples hit their 50s, it’s likely that the children will have left home. Some couples find that they were so preoccupied with caring for their children that they hadn’t realised just how much they had drifted apart over the years. Such couples have trouble adapting to a life without the children at home and the irreconcilable differences between them can lead to a divorce.
Older couples will have commonly acquired more wealth than younger couples which can make that uncoupling process more complicated. They will also have specific considerations to take account of around financial planning for their future.
If you are an older couple, it’s more likely that you were in traditional marriage with the wife giving up a career to be a homemaker and to look after the children and the husband becoming the main breadwinner. In the comments I make below for ease I have assumed a traditional marriage with the homemaker wife and breadwinner husband but, of course, even with the over 50s there are many marriages where the wife has traditionally earned more than the husband and the roles of homemaker and breadwinner are reversed. My comments below apply equally to same sex marriages where there might be an inequality in earning power between the same sex couple.
If you are thinking of a divorce and you are a “silver separator” here are some of the key matters you need to consider:
Pensions -. There may be a very large discrepancy in the value of the pensions of the homemaker who may have contributed little to a pension pot and the breadwinner who may have accumulated a very large pension over the years.
In the event of a divorce, the pension provision of the couple would be shared between them, normally to provide both husband and wife equal pension income upon retirement or they might end up with equal capital values of the total pension pot between them. If the husband accumulated some pension before the marriage, it might be appropriate for that pre-marriage pension to be left out of account. However, this would not be fair in every scenario. If the wife’s future income needs mean that leaving some of the husband’s pension out of account would leave her short into retirement, then all the husband’s pension provision should be shared and distributed fairly between the couple.
In my experience husbands can be overly attached to their pension provision (and so pay over the odds to keep it) and wives can be too quick to give that up for a bigger share in the house or a bigger sum of the savings. A trade off of this kind where a husband keeps a greater share of the pension, and a wife keeps a greater share of the other assets is called a “pension offset.” A pension can be a valuable asset. Careful consideration should always be given to any pension offset after taking legal advice. A husband should never pay too much to keep his pension and a wife should never give it up too readily.
How should the assets be shared? – it might be appropriate for the financially weaker of the couple (say the wife) to get a larger share of the assets if that is the only way in which she could buy a home mortgage free or with a very small mortgage with her smaller earnings. Older couples will find it more difficult and expensive to get mortgages because the rate of repayment will have to be over a shorter period. The wife, if she has been out of work for many years, might not qualify for a mortgage at all. This will be a major consideration when dividing up the assets between the separating couple.
Budgeting for the future– ongoing maintenance provision will be an important feature of a grey divorce. The Courts generally encourage divorcing couples to gain financial independence of each other particularly by the time the children are no longer dependent. This is known as a “clean break.”
However, a clean break might not work for an older couple where the homemaker might not have worked for many years and could not realistically go out and get a job that would provide financial independence. If the wife finds herself in that position, then legal advice is so important because, without adequate maintenance, she could find herself struggling to make ends meet after the divorce when she should not have to.
There are many factors to take account of and silver separators should seek legal and financial advice at an early stage. Any financial settlement must always be tailor made for each divorcing couple because their financial circumstances will be unique to them.
If you would like a complimentary, confidential consultation to discuss your own personal circumstances, please contact Saika Alam, an experienced family lawyer and head of the family law department at Branch Austin McCormick.
Please contact Saika at firstname.lastname@example.org or on her direct line at 020 7851 0110.