Recently Maryanne Golsan, dear friend and family lawyer in Culver City, California, and I were talking about the intersection of conscious aging and the trend of grey divorce. Our lively discussion inspired us to collaborate on this blog post.
We intend to encourage you, or someone you care about, to be positive and make the best of what many people find to be a difficult, yet necessary, and often fulfilling next step. What follows is only a preliminary list and should not be taken as advice.
Here are some considerations to take seriously:
1. Be smart about how to get the most out of the money you will spend on getting divorced.
You and your soon-to-be-ex have spent the better part of your adult lives accumulating assets for your golden years. Though these years will be spent apart, this doesn't mean you have to feel poor financially or psychologically, especially if you take certain steps in the planning and negotiating stages. Additionally, accept that you will need ongoing emotional support throughout the process to stay focused and strong.
2. Think clearly about Social Security and Medicare options as part of your settlement position.
While these are Federal benefits, they are often overlooked and not discussed meticulously enough in the context of grey divorce.
3. Be super-saavy about real estate strategies.
Accept that selling your primary residence may be part of your final settlement. It may be wise to stay married during the next tax period to get the double exemption on capital gains.
4. The division of retirement benefits is key.
Know the difference and educate yourself thoroughly on the vast differences between a 'defined benefit plan' and a 'defined contribution plan.' What combination of options is best for you must be examined closely and thought through in depth.
5. Don't forget about life insurance.
Thinking about divorce and death in the same negotiation seems like a hardship but, each person needs to consider long term security. Expect for each of you to maintain a life insurance policy on the other. Also, if you're of a certain age, consider the benefits of maintaining existing life insurance on the other spouse, rather than letting the policies lapse, or cashing them out for short term money.
6. Learn to love down-sizing, so that you can live without significant earnings from employment, if you want to retire.
Have a financial planner you can trust in place before, during and after your divorce. Explore what your real financial position is. Do an informed reality check if you find yourself feeling impoverished and fearful. No one wants to outlive their money, but Maryanne has found that even the wealthiest clients have some irrational fears about their future security.
7. Avoid disruption of important relationships.
This includes your ex, their new partners, in-laws, extended family and friends as well. Remember, even adult children may have trouble accepting the decision to divorce. In Maryanne's experience she has encountered problems with people making decisions due to the strong influence of family and adult children's (and even grandchildren's) wishes for unity of the couple. Less tension helps preserve relationships for generations to come.
As Maryanne and I continue our lively discussions, we will you keep you, dear readers, in the loop with updates. Stay tuned...