A gray divorce is one that involves couples over the age of 50. Although some gray divorces are short-term, the majority involve couples who have been married for many years. There are issues unique to this type of divorce that are not faced by younger couples. For example:
- There are no minor children, so custody and support are not issues.
- Often, one spouse has been out of the workforce for many years, so spousal support is more of an issue.
- They have a retirement plan that must be divided.
- The spouses have accumulated more assets than younger couples, so property division is the main issue in the divorce process.
Gray Divorce: Information Collection and Asset Division
Texas is a community property state. This means all assets acquired by the couple during their marriage belong to them both equally and the assets will be divided accordingly.
A problem arises in a gray divorce in that it is common for one spouse in a long-term marriage to not even know what their assets are. This makes it imperative to collect all the information and documentation before going to the next step of asset division.
Information collection: Documents needed
- A list of all assets owned together or separately.
- Marital property and separate property must be identified. For example, property owned prior to the marriage and never co-mingled is not community property. One party’s inheritance or personal injury award is not community property but is the private property of the person who received it.
- Report of all income from all sources, including earned income, Social Security benefits, and income from all investments, for example.
- Report of all expenses.
- Report of all bank accounts and retirement plans.
Asset division considerations
Just a few major considerations for the division of assets in a gray divorce are:
- What will happen to the family home, especially if the mortgage has been paid in full.
- Tax implications for each party.
- Adequate budgeting and cash flow for the two separate residences. Gray divorces often involve couples who are used to a certain standard of living that may be difficult to maintain when the assets and income are divided in half.
Spousal Support in a Gray Divorce
In a gray divorce, a spouse who has not been employed for many years may be entitled to spousal support while they learn new skills and prepare themselves to enter the workforce. Alimony is designed to be a cushion to help that spouse get back on their feet.
The spouse who has not been in the workforce may also be given a larger share of the assets to make up for the loss they will have by not being employable.
For more information about a gray divorce or any aspect of your divorce, contact Daniel Abasolo at Springer & Lyle, LLP, to schedule a consultation.