What is "Gray Divorce" and How Does It Impact Your Estate Plan?
Despite the overall divorce rate declining over the past 20 years, divorces among older adults are increasing. The Pew Research Center reports that the divorce rate has doubled over the past 25 years for couples over 50.
Divorces between older couples, called "gray divorce" or "silver divorce," is rising for several reasons. The couple may grow apart after their adult children leave the nest. People have a longer life expectancy, so if they are unhappy with their partner, they may look for another. And because women are no longer financially dependent on their husbands, they can live more independently.
While older adults may not have to wrestle with child custody or child support, divorce after long-term marriage still presents challenges — especially when it comes to estate planning. Here are some tips on things to do after the divorce settlement.
Update Any Estate Planning Documents
After a divorce settlement, some of your estate planning decisions may become void. For example, suppose you named your spouse as your healthcare proxy (who makes medical decisions on your behalf if you cannot). Once your spouse becomes your ex-spouse, your state may treat them as if they predeceased you. So you need to update your health care power of attorney to a new proxy.
Update Transfer-On-Death Accounts and Policies
Certain assets and property transfer outside your will, such as transfer-on-death (TOD) accounts and life insurance policies. These assets and policies go to the named beneficiary, and if your former spouse is still named, they will receive those assets and benefits.
- Bank Accounts, Retirement Accounts, and Pensions. These accounts have named beneficiaries, and you may want to update them. Regardless of any instructions in a will, the named beneficiary receives these assets and benefits once you die.
- Life Insurance. If you own a life insurance policy, check your beneficiary designation and update it if necessary. If your former spouse is the policy owner, you may be unable to change the beneficiary.
- Real Estate Held Jointly. Your divorce attorney may have settled any property division between you and your former spouse. However, check to ensure you do not hold property titles in both names as joint tenants with the right of survivorship. Otherwise, if you die before your former spouse, they will receive 100% of the real estate.
- Long-Term Care Policies. If you had a joint policy for long-term care, you might need to change the details of your long-term care planning and policy.
Choose new beneficiaries for your accounts, assets, and policies. It may be a good idea to make sure that any retirement benefits, social security benefits, or other benefits are not directed to your former spouse unless it is part of a divorce decree.
Additionally, check your health insurance. While not an asset, it is still essential to have. If you are on your spouse's policy, you may need to get your own health care plan.
Create a New Estate Plan
If you haven't created any estate planning documents, such as a will, power of attorney, health care directive or living will, now is the time to start.
- A will is a legal document that sets forth your instructions on who manages your estate (your personal representative), who receives your property (your beneficiaries), and who cares for your minor children (their guardian).
- A power of attorney allows you to name someone you trust to handle your financial affairs if you are unable to due to incapacity or even being unavailable. Your agent is your fiduciary and acts in your best interest. You decide what powers to give your agent and when their authority begins and ends.
- A living will or healthcare directives lets you name someone to make medical decisions on your behalf when you cannot. And you can give instructions about what life-prolonging treatments you want (or don't want) if you have an end-stage terminal illness.
You can create your customized estate plan with FindLaw's state-specific online forms or contact a local elder law or estate planning attorney to help you.
Even younger couples going through the divorce process benefit from looking at their estate plans and revising or creating new ones.
- Five Estate Planning Moves To Make After Divorce (FindLaw's Law and Daily Life)
- Checklist: What to Do After a Divorce (FindLaw's Learn About the Law)
- Estate Planning Forms (FindLaw Legal Forms & Services)
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.