Going through a divorce is emotionally stressful, but this is especially true for older adults. Meanwhile, divorce has become more commonplace for individuals in this age range. To put it into perspective, divorce rates for couples over the age of 65 have more than doubled since 1990. Thus, it is not surprising that a name has become associated with this phenomenon. Specifically, “gray divorce” is a term used for couples 55 years of age or older who make the hard decision to divorce later in life. Divorces that fall under this category come with many complex issues.
Retired spouses are likely to encounter a litany of special problems. Preliminarily, a spouse’s retirement will not automatically relieve him/her/them from paying alimony or entitle him/her/them to receive alimony. Instead, a spouse’s retirement is a factor for consideration when analyzing the alimony statute, namely N.J.S.A. 2A:34-23, et seq. For additional information regarding an obligor’s responsibility to pay alimony in preparation for or beyond retirement, see our related article here.
While retirement assets are subject to equitable distribution under New Jersey law, the parties are bound by parameters of each particular retirement plan. For instance, certain retirement plans may not allow you to “unselect” a spouse’s receipt of survivor benefits after the asset is in pay status. On the other hand, other retirement assets automatically bar a former spouse from receiving a survivor benefit despite any voluntary election or Court Order. It is important for an attorney to navigate these intricate issues.
Older spouses are more likely to be reliant on federal financial programs, such as Social Security, Medicaid, and Medicare. Notwithstanding a divorce, if you were married a duration longer than 10 years you may be able to collect on your ex-spouse’s Social Security, assuming certain age requirements and work credits are met. However, if a spouse is entitled to make a claim based on his/her/their own work record, Social Security will not add both rates but rather, will pay a blended combination that equals the higher amount. Notably, an ex-spouse’s election of Social Security does not impact the other party’s level of benefits. Nevertheless, individuals in this situation should understand his/her/their options to obtain the maximum benefit.
Similarly, a spouse’s eligibility to qualify for Medicare available to an ex-spouse following the Judgment of Divorce is also dependent on a variety of factors that warrant careful consideration in connection with this process. As to Medicaid, a former spouse’s entitlement to this health insurance is primarily dependent upon certain physical and financial conditions. As to the latter, Medicaid may be impacted by alimony, child support, and equitable distribution and thus, it is also vital to fully understand the consequences of a Court Order or agreement within these categories.
A final topic of discussion may cause some uncomfortable conversations but is necessary to address. To that end, what happens to the cemetery plot you purchased with your spouse? If the plot was acquired and fully paid before you entered into the marriage, it will likely be considered separate property. However, cemetery plots purchased during the marriage are considered marital property and will be divided based upon the factors of equitable distribution. If this plot is meaningful or sentimental to one spouse, trying to reach a settlement may be the best option. Buying out a spouse’s ownership interest may be a possibility, but this option may come with a financial premium. If neither spouse wants to retain the cemetery plots, it may become necessary to sell or relinquish these plots in accordance with the terms and conditions of the cemetery. Regardless, however, all agreements or judgments should address this “asset,” because complications may ensue if an issue arises down the road, i.e. either spouse remarries and wants to be buried next to his/her/their new spouse.
In addition to the foregoing, there are numerous other nuances and issues to consider in connection in the context of a “gray divorce.” If you are encountering this situation and have specific or additional questions, contact the attorneys at Donahue, Hagan, Klein, & Weisberg, LLC for a consultation.