Navigating Silver Foxes and Vixens Through Divorce
by Sally Pretorius
Advising older clients on how to navigate legal issues in a divorce is more complicated than younger clients because there are usually more assets and larger estates at stake. KoonsFuller shareholder Sally Pretorius walks through important steps for a “Grey Divorce.”
The “Grey Divorce,” the “Diamond Divorce,” or the “Silver Split.” Whichever term you prefer, all refer to the divorces of those over the age of 50 (or more flatteringly called Silver Foxes and Vixens) who are going through a divorce.
These terms were all coined because the Grey Divorce is becoming more and more prevalent. In fact, in August we even saw 85-year-old Larry King’s divorce from his seventh wife of 22 years enter the news spotlight.
With this section of the population seeking divorces at growing proportions, attorney should be aware of several issues that consistently come up when guiding Diamond Divorcees through the process:
- ascertaining larger estates,
- addressing social security benefits,
- securing health care coverage, and
- compensating a non-working spouse.
If you have been living the “American Dream” or have just been responsibly planning for retirement and find yourself in a Silver Split, odds are that you have accumulated a more substantial estate than the average 30-something going through a divorce. As The Notorious B.I.G. coined: “mo money, mo problems.”
The first step when handling a case with larger assets is ascertaining what assets exist. That may be accomplished in a variety of ways, but the two most common are an informal exchange of asset information and availing yourself of the rules of civil procedure that apply to your state to formally request the documents through the legal process.
Once a divorce lawyer knows what assets exist, the next step is to determine their value, which may mean hiring appraisers and experts.
Another layer to the process may include what we call tracing, which involves tracking an assets’ origin to see if it is separate property or to see if assets were hide throughout the marriage. You will want to select someone who is credible and who those in the legal profession recognize and respect.
Spousal Support/Disproportionate Shares
In many Diamond Divorces, you will find one spouse whose primary role was to maintain the household and raise the children while the other spouse was employed outside the home. The two often worked as a team and relied on the salary of one spouse to support the household.
Upon divorce, we have one spouse who has worked 20-plus years building a career, a reputation for himself or herself, and likely a substantial salary versus a spouse who has very little marketability in the job market. Many states have spousal support structured to assist a spouse to become employable and provide for minimum reasonable needs (e.g., Texas) and some states have spousal support structured as more of an equitable claim (e.g., California).
Nonetheless, it is important to prepare your client for the possibility of either receiving spousal support or paying spousal support and what the parameters are based on your state’s laws. Having clients meet with a financial planner to determine budgets and future needs combined with those parameters can be helpful in guiding your client to a successful divorce settlement or preparing them for a more litigious route.
In addition to spousal support, there is the possibility of a disproportionate division of the community estate to help compensate a spouse for lack of earning capacity or maybe to right a wrong committed during the marriage (i.e. a cheating spouse spending community assets on a girlfriend). While the disproportionate division may not be a 90/10 split, a 60/40 split of a million-dollar estate could mean an extra $100,000.
Silver clients often ask if the court can divide Social Security benefits or if they are entitled to a portion of their spouse’s Social Security benefits. It is important to note that the payment of Social Security benefits is governed by federal law and policy.
Divorce proceedings are held in state courts, and state courts do not have jurisdiction or authority to direct the federal government on how to divide assets or to change its policies. Thus, state courts are bound by the federal law and policies that govern Social Security benefits, and so are divorces. Along those lines, spouses can qualify for Social Security benefits independently and based on their spouse’s employment and contributions (if they were married for more than 10 years).
If you have a client that is eligible for Social Security benefits, it is advisable to have them contact the Social Security Administration and/or financial adviser directly and find out what benefits they qualify for and when is the best/most advisable time for them to begin drawing those benefits.
Continued health care is important to most everyone, but with our Silver clients, it is a priority. If one spouse is covering another spouse under his or her insurance policy, the non-covering spouse’s health insurance benefits and coverage will terminate upon the date of the divorce (or in some cases at the end of the month of divorce). After the termination of benefits, COBRA coverage is an option, but it must be provided to a spouse directly by the health insurance company. If a spouse chooses COBRA coverage, it typically comes at a high price.
Since the health care coverage terminates automatically, it may be important for a client to negotiate or request more support from the court in order to continue health insurance coverage through COBRA, through another private option, or even through Medicare (if it’s an option).
Bearing these major topics in mind, knowing the law in your state can help you navigate your more mature clients through their Grey Divorce.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.