The term ‘Silver Splitter’ or ‘Grey divorce’ refers to the growing number of people getting divorced later on in life. Over the past couple of decades there has been a significant increase in the number of married couples from the older generation deciding to separate (Source: Office for National Statistics). Despite the challenges that a ‘Silver Splitter’ divorce can present, it can also bring positive changes for some, allowing personal growth and independence.
This article will outline the legal options when getting a ‘Silver Splitter’ divorce, any financial considerations that should be taken into account and what support Goughs Solicitors as a firm can offer you when going through this difficult time.
What to consider in a grey divorce
A ‘Silver splitter divorce’ or ‘Grey divorce’ is a phrase that is typically used for people aged 50 or above that have decided to get a divorce. The majority of ‘Silver Splitters’ have often been in long-term relationships where their children have grown up and left the family home. The long-shared experiences between these couples can make it extremely difficult to take the step of filing for divorce opposed to younger couples for many different reasons.
Older couples who have spent a long time together are usually tied to the relationship by financial complications such as the division of long-held assets, pension plans and retirement savings. Compared to the younger generation that are instead, usually, fighting over the custody rights of children and parenting methods. The longer the marriage the more integrated the financial and personal arrangements tend to be, making the separation process more complex.
Couples that have had a long-term marriage not only have to consider the financial elements when getting divorced but also their health and lifestyle during this tough time. A Silver Split divorce is a major transition that can have a detrimental effect on a person’s mental health, bringing up feelings of stress and anxiety following the grief of the relationship. Those breaking away from a long-term marriage may question their identity and position within the community and therefore support systems are available to guide them through this.
Unique financial considerations of a grey divorce
There are typically two main financial issues that often arise from Silver Split divorces. These are Asset Division and Retirement Planning.
Asset Division
Asset Division is a major issue when having a Silver Split divorce as finances are deeply interconnected when couples have been together a long time. The divorce process is designed to achieve the most fair outcome for both of the parties involved, which usually takes the outcome of equally dividing the assets. However, due to the other factors that need to be considered such as health, future and financial contributions the courts divert away from the usual 50/50 split.
Retirement Planning
Pensions can be one of the most valuable assets within a divorce and they have three primary ways of being split.
A pension Sharing Order can be used to divide pension assets between a couple by allowing a percentage of one spouse’s pension to be transferred to the other as part of a financial settlement.
A pension attachment order is a court order that instructs a pension provider to pay a portion of a member’s pension benefit directly to their ex-spouse.
Pension offsetting is where one spouse keeps their pension, while the other retains other assets – most commonly the family home.
Tax Advice
‘Silver Splitters’ should be aware that divorcing later in life may have significant tax implications. It is important that they take independent financial advice primarily around Capital Gains Tax and the transfer of assets, business assets, pension sharing and loss of spousal tax exemptions.
Impact on adult children and family relationships
Many couples divorcing later in life may have stayed together for the children whilst they were young, but this does not mean that it becomes easier for those children involved. For many of those children, their parents’ marriage has been the blueprint for their relationships and it can cause intense grief and anxiety. There is often a sense of loss of traditions, family holidays and there may even be arrangements involving grandchildren to navigate. Being mindful of their feelings and maintaining open communication can help minimise any unintended strain.
It is important that family therapy or counselling is sought at an early stage no matter how old or resilient you think your children might be. Goughs understand that divorce impacts a broader family dynamic and we can point you in the right direction of any support you may need.
Alternatives to divorce for older couples
For some couples they would like an agreement drawn up that sets out how they will live apart, manage finances and care for the children and often a Separation Agreement is more palatable than starting divorce proceedings. Whilst the agreements can be flexible and less expensive, they are not legally binding and would not be enforceable. You also remain married to the other party so would not be able to remarry.
Alternatively, some couples consider judicial separation. This option is often considered because the parties cannot divorce because they have been married for less than a year or, for religious reasons. In these circumstances, one of the parties must issue an application with the Court. The Court can also make an Order in respect of finances, but they cannot obtain a Pension Order and will remain married.
Legal protections and estate planning
Divorcing clients should revisit their Wills. For many couples, they would have created mirror Wills, meaning if one passes away the other automatically inherits the estate. If you die without a Will your assets may not be dealt with in accordance with your wishes. If you were to die before the Final Order in the divorce proceedings is granted your spouse may be the sole beneficiary under the rules of intestacy.
Furthermore, divorce revokes any gift made to a former spouse so if you have a Will already it is important to consider the terms of the Will to ensure it reflects your new intentions. It is also important to check the beneficiary nominations on pensions or life insurance policies.
Whilst we are a generation that are living longer, it is important to think about future incapacity and to plan your legal affairs and finances for life such as:
- Minimising your Inheritance Tax liability
- Sorting out pre-paid funeral plans
- Setting up trusts for your family and protecting assets for future generations through a Will.
- Appointing Attorneys to manage your financial affairs and to make health and welfare decisions on your behalf by Lasting Powers of Attorney is also an important part of the process.
Are you divorcing later in life?
Divorcing later in life may seem daunting, but with changing attitudes, longer life expectancy and greater financial security, it is also the mark of a new beginning. With the right advice and a carefully planned approach it is possible to move forward with confidence and to experience a whole new life ahead of you.
How Goughs can help
Our experienced family solicitors are able to advise you at every stage of life with particular sensitivity to the financial and emotional pressures faced by older clients. If you would like any advice please contact us today to arrange a free 30 minute consultation and take the first leap towards securing your future.
