Last week it was announced that Bill and Melinda Gates are getting divorced after 27 years. It has taken people by surprise as, from the outside, it looked like a perfect match. However, it is yet another high-profile confirmation of the growing trend for ‘grey divorce’ and brings to light some of the common issues in a grey divorce.
Statistics show more and more people in their late 50s and 60s are choosing to leave their marriages at a time when their families and friends probably think they are at their most settled.
The reasons behind the split will vary from couple to couple but according to experts it is generally triggered by one of two common reasons.
The first is there is no longer a need to stay together for the children once they leave home or have left to go to University.
The second is the sudden realisation their imminent retirement will mean living together in close and constant proximity. This causes people to evaluate their relationship and consider whether this is still what both parties want.
Whatever the reasons for separating, as a more mature couple will be at a very different life stage, there are several factors that will probably require greater consideration than they would for a younger couple.
As parties separating in later life may wish to prioritise preserving more of what they have and take a more constructive approach, it is essential to agree on the best way to divorce as this no longer has to mean going into acrimonious court proceedings.
There are several options to consider, including:
Both parties have a family solicitor who would manage their case through court. While this method can be more effective when the parties are unable to reach a mutually agreeable solution, the costs can be higher than with an alternative process, especially if matters become more complex and protracted.
Both parties work with a neutral trained mediator working through all the inherent issues until a satisfactory resolution is reached. You can also have your own solicitor providing independent advice as mediation progresses. The proposed settlement would then be approved by the court.
Collaboration is similar to mediation but rather than working through the relevant issues with a mediator, you and your spouse would work with your solicitors in a series of four-way sessions to reach a settlement.
There are also other forms of dispute resolution which can be explored, such as informal round table meetings, negotiation, arbitration and private court hearings to divert cases away from formal court proceedings.
It is important to remember that while mediation and collaboration or other dispute resolution processes are often seen as more cost-effective and less stressful than a traditional divorce through court, this may still become the only option if agreements cannot be reached using alternative dispute resolution methods.
And if we look more specifically at the types of agreements that will need to be reached, this takes us to areas where more mature couples often need to pay more attention to than their younger counterparts.
A fair division of assets is always key to a divorce settlement but the later in life you are, the more assets you are likely to have accrued.
Moreover, thought must also be given to each party’s ability to take care of themselves moving forward in their later years. In many long-term marriages there is often one partner who has relied on the other as the sole bread winner. That reliance will no longer be supported following the divorce.
This means all assets must be considered. This includes not only savings and property but also investments, planned retirement accounts, and pensions.
And, where the potential future performance of these additional sources of income are more fluid (i.e. stock, shares and pensions) thought has to be given to both expected future market performance and the likely tax considerations.
At a later stage of life, standard of living also becomes more important, particularly if the couple has worked hard to make sure they have the resources to cover the cost of the retirement they planned.
This not only makes it even more crucial that all assets are divided (and this division takes into consideration both their current worth and future growth), it also means there should be discussions as to whether a one-off payment is enough or there a continual income is required to cover bills and the other costs of living.
Insurance is another potential consideration.
If one spouse is covered by their partner’s health insurance policy, an alternative may need to be purchased in case ill health becomes an issue in later life.
Similarly, as you get older there may be a risk that maintenance payments could cease if one party were to die. This could mean being named as the beneficiary of your ex-spouse’s life insurance policy could provide a welcome additional layer of security.
Inheritance received by either spouse during the marriage is often a relevant issue. How this is dealt with in the event it has been mixed in with the couple’s assets or kept aside by the receiving spouse as their ‘own’.
The other consideration is ensuring there is protection in place for financial provision should one spouse die before the financial settlement is finalised.
Children and the extended family are the other major consideration.
Later in life your children are much less likely to need you to make decisions regarding where they live or visitation rights.
They are however going to need you to review and update your Wills to make sure they will still receive what you want them to in the event of your death. Your new status could also influence any tax planning you previously put in place. This means it is also important to make sure this is part of your Will review.
From a more personal perspective, the fact your children are older and may even have families of their own will not make the divorce any easier.
Enormous tensions can flare during a divorce – between siblings and other family members as much as between parents and their children – so make sure you keep those closest to you up to date and provide them with the opportunity to ask about and discuss their concerns.