Dubbed ‘grey divorce’ or ‘silver separation’, the rise of couples in their 50s and above seeking a divorce has risen drastically in the last decade.
According to a study by the Australian Institute of Family Studies, couples with over twenty years of marriage behind them accounted for more than one quarter of all divorces in Australia in 2021. Several factors have contributed to this rise, including increased life expectancy, greater financial independence for all genders and changing social attitudes towards marriage and divorce.
Divorce at any life stage is challenging, but for older Aussies, it comes with unique considerations and complexities. Signing on the dotted line of a divorce paper is only one small part of a larger process to ensure emotional and financial freedom from one another. This blog will help explore the five key considerations of grey divorce.
1. Property settlement and asset division
The financial impact is one of most significant challenges of grey divorce. Due to both their age and generation, older couples have typically accumulated more assets and wealth, which makes property settlement more complex. This may include multiple properties, investments, superannuation funds and other valuable assets. Dividing these assets fairly can be contentious and requires careful negotiation and, often, legal intervention, especially to provide financial security for both parties. Although many larger assets have typically been paid off by this age, such as mortgages, it’s important that financial security post-divorce isn’t assumed.
Superannuation is another major asset for older Australians. During a divorce, superannuation entitlements must be considered and divided according to the Family Law Act. Understanding the implications of superannuation splitting is crucial for ensuring financial stability post-divorce, particularly if one partner accumulated less personal superannuation due to taking time off employment to raise a family.
Engaging an experienced family lawyer to assist with property settlement is essential to ensure a fair division of assets that considers the unique needs circumstances of older individuals.
2. Updating key legal documents, including your Will.
Older couples are likely to have in place a Will each that leaves their entire estate to the other in the event of their death. Without making a new Will, it is possible a couple may negotiate a property settlement only to have their share of the property settlement estate gifted back to their former spouse upon death.
Revising your Will after separation is essential to guarantee that your assets are distributed according to your current intentions. This helps to minimise potential disputes and unintended beneficiaries. Updating your Will also means appointing a new Executor and, if applicable, an Enduring Power of Attorney to make financial, personal and medical decisions on your behalf should you be unable to do so yourself. You can read more about appointing an Executor via this blog, or read more about the role of an Enduring Power of Attorney here.
3. Updating health insurance and ambulance cover.
These are two important items for older Aussies (all Aussies!) that are often purchased as a couple. Ensure you are adequately covered post-divorce by reviewing your health insurance policy and ambulance cover.
While you’re at it, revising emergency contacts is vital for ensuring that the right people are informed and can act swiftly in urgent situations. This ensures that your current wishes are respected and legally recognised, preventing ex-spouses from having control over your medical or financial decisions.
4. Mental and emotional support.
The conversation surrounding divorce is often focused on the legal and financial implications, but the emotional journey stems far beyond any legal processes or negotiations. For older couples that have built an intertwined life, the emotional and social implications can be profound. Engaging in regular exercise, maintaining a healthy diet and seeking support from mental health professionals can promote overall wellbeing. Be sure to lean on friends, family and support groups for emotional support. Connecting with others who are going through similar experiences can provide comfort and guidance.
5. Retirement plans.
Divorce can significantly impact retirement plans. Couples who have been saving and planning for retirement together must reassess their financial goals and strategies. It may involve selling the family home, downsizing or re-entering the workforce to secure financial independence. Speaking to a financial advisor following the property settlement and asset division process can help ensure financial security in the future.
