Navigating a Gray Divorce
These days, divorce for those over the age of 50 has become more common. While people usually don’t include divorce as a goal in life, it’s an unfortunate reality for many, and there are some unique considerations for those of us who are of a certain age (i.e., the “gray hair” generation).
We recently had the opportunity to speak with Heather Locus, who leads the Divorce Practice Group at Corient’s Chicago office. Here are some highlights from that conversation.
How did you start advising high-net-worth clients on divorce?
Years ago, I unexpectedly found myself getting divorced, and I realized there was so much more we could do to help men and women make smart decisions, creating a positive post-divorce world where they can co-parent and co-grandparent well. That’s really my mission and what I spend most of my time on.
Since we also do a lot of prenup work, we often advise clients’ children or grandchildren when they’re getting engaged or married, helping them start off right so that, hopefully, they don’t end up needing our help later.
What is this so-called “gray divorce” trend?
Between the years 1990 and 2015, the divorce rate for those under 50 actually declined. Meanwhile, the divorce rate for those over 50 doubled, and by 2030, it’s projected to more than triple.
I think this is happening for two main reasons. One, we’re living longer, and people are asking, “What does the second half of my life look like?” For most of us, that’s another 20+ years, and there’s a reasonable probability that it’ll be 40 more years for at least one of the spouses.
The second reason, especially for our clients, is that they have more financial choices than people have had historically. They can afford to live in two households now and create a very prosperous life on their own without having to settle and be unhappy.
I think what often causes divorce, particularly for people in our clients’ situations, is that we have two highly educated people. One has a career that’s very demanding but earns a lot of money, while the other takes on significantly more household responsibilities. Both have difficult jobs, but no matter how much they love one another, it’s hard for them to truly understand what it’s like for the other one, particularly what unique challenges and stress they must endure.
After divorcing, the breadwinner now has to pick up their own cleaning, cook every day and take care of those kids (if applicable). Similarly, the spouse who was staying predominantly at home enters the workforce, where there’s constant pressure to perform and deliver. It’s sad when I see these couples a few years later, and they admit, “I didn't realize how hard it was for my spouse.”
What are some steps people could take before deciding to divorce?
The first thing I recommend is to go through discernment counseling. It’s only one to four sessions, so it’s not trying to fix the marriage, but it will help you decide if divorce is truly the best path forward.
If you still want to work on your marriage, another path is to enact a postnuptial agreement. This means documenting what would happen with the finances if you were to divorce. This can help put clarity around the finances while you focus on the relational parts of the marriage. We have clients who have had the “safety net” of a postnup and have actually been able to revive their marriage.
What’s different about divorcing later in life versus when you’re younger?
Later in life, there’s usually less to negotiate around parenting issues. Having said that, divorce is still difficult for older kids, including adult children. They have this whole life of memories, and now that’s drastically changed.
Financially, there are typically more assets to work with, and you are hopefully not supporting your kids as much. On the challenging side, there aren’t as many years to work and to recover from splitting assets and establishing a second home and other extra expenses that you probably weren’t planning to have in retirement.
What kind of team does someone need to help them get through a split?
I believe your Corient Wealth Advisor is often the best place to start because they’re familiar with all the assets and know the couple’s circumstances. Most times with our clients, we are the people they talk to first. We help them get organized, and we recommend attorneys to them.
It’s really important to find a divorce attorney who has the right experience. If you’re older, you may not need an attorney who is great at negotiating parenting plans, but you may need an attorney who is sophisticated with regard to taxes, retirement plans, stock options, private equity, hedge funds and illiquid investments—someone who understands the complexities of your situation.
How do you ultimately reach a divorce settlement?
In terms of the legal process, there are three primary ways to get divorced. There’s the traditional way, where you each have your own attorney, and they do most of the communicating and sometimes go to a judge. This approach can be slow, combative and expensive.
Another option is where your lawyers mediate a direct dialogue between spouses—or bring in an outside mediator—and you collaborate to create a solution in the context of the law, as well as what’s important to each spouse and what’s best for their kids.
A third choice is called collaborative, which sits somewhere between traditional and mediation. Each spouse agrees that if they can’t come to a settlement agreement in a collaborative process that involves their attorneys, then they’ll start over with new attorneys. One benefit of this approach is it’s very private, which is especially important for executives and other high-profile people who don’t want their affairs in public court documents.
What does success look like for someone who has been through a gray divorce?
I would say the most important thing is making educated, informed, non-emotional decisions while processing all the emotions. You want to look back and say that you were respectful to your spouse, you were truthful, you were transparent, and you acted with integrity.
When you’re going through the finances, you don’t need to know all the details. If you hire the right team, they should be coming to you with, “Here are a couple of good options, here are my recommendations for you, and this is why I think it’s a good fit.” Then, it’s up to you to consider the recommendations and choose the option that best suits your wishes and circumstances.
But remember, you are the CEO of your divorce and your life. No matter how much you tell your attorney or financial advisor or therapist, you can never explain all of the nuances of your life. Listen to their advice and then trust your gut. Know that it’ll be difficult but that you will ultimately be better positioned to create a wonderful next chapter.
ABOUT THE AUTHOR
Charlie Jordan, CPA, CFP, CeFT
Charlie is a Partner, Wealth Advisor in our Atlanta office. Previously, he led the Retiring Well Practice Management group at legacy firm Brightworth. Charlie focuses on helping clients think differently about retirement, integrating the technical and personal sides of money. Charlie is a CPA, CFP® practitioner and Certified Financial Transitionist (CeFT). He is a graduate of the University of Florida and received a Master in Accountancy from Kennesaw State University.
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