Divorce Blog

What is a Gray Divorce?

By Daryl Maksymec

What is a Gray Divorce?

Gray Divorce refers to the demographics of couples over the age of 50, getting a divorce. While the overall divorce rates are in decline, it has doubled for this segment of the population. The expressions “Silver Splitters” or “Diamond Divorcees” are also referring to this trend. People who were born during the Baby Boomer generation have seen the most increase in divorce rates. This upswing coined the term “Gray Divorce.”

The trend of divorcing seniors continues

Baby Boomers get a lot of attention. They remain one of the largest demographics in the western world. Their lifestyle and spending habits drive market innovation and branding. While companies have had success predicting trends in the past, no one could predict the onslaught of divorce among baby boomers.

Gray DivorceThe impact of gray divorce is far-reaching. It affects housing, travel, retirement spending, and of course, the providers of divorce services. Families, including children and grandchildren, also feel its effects. While divorce rates flattened or decreased in some demographics, the statistics for gray divorces are increasing.

Facts About Gray Divorce

  • The average marriage duration is between 20 and 30 years.
  • The divorce rate has doubled over the past two decades.
  • Married individuals over 50, included college-educated, are twice as likely to divorce as they were in 1990.
  • More than 55 percent of gray divorces involved a split of couples together for more than 20 years.
  • Statistics Canada doesn’t record current data on age-based divorce rates. The median age for divorce rose between 1991 to 2008: for men, it jumped from 38.3 to 44 years. For women, statistics jumped from 35.7 to 41 years, and the trend is increasing.
  • Dual income earners are providing each party with the feeling of more financial stability and independence.
  • The Canadian Laws and the Federal Child and Spousal Support guidelines give divorcing parties (mainly women) much greater confidence and certainty around both the financial division and support payments. They can focus on their happy quotient.
  • Boomers may also be repeating “marital instability” patterns from their early years. The Pew Research Centre says that “during their young adulthood, Baby Boomers had unprecedented levels of divorce.” This pattern can be contributing to divorces among them today.
  • This group has a unique set of challenges when it comes to splitting assets. Their age, careers, retirement, and children mean that their high-income years are either behind them or peaking. At this point, “making it up” is less likely than their younger counterparts.

What are the main reasons Baby Boomers are Getting Divorced?

The baby boomer generation is different than the previous generations. They have accumulated wealth through dual-income families. Also, they have benefited from travelling and an increased life span associated partly with active lives. The gray divorcing market wants and expects more out of life. They do not want to settle.

Top 12 reasons “Grays” are getting divorced

#1. The stigma around divorce has changed.

For many generations, couples stayed together due to stigma around divorce or for religious reasons. While it is no longer the case, many more couples are okay with ending an unhappy marriage. The concept of “Growing Apart” has become an acceptable reason to part ways.

#2. Second marriages later in life are almost the norm

Older adults have hope that the grass is greener on the other side. Many are permitting each other to exit when things are no longer suitable.

#3. Dating websites make meeting other singles easier

With the advent of dating websites, the prospects can be plentiful.

#4. People are living longer

Between 1921 and 2005, life expectancy increased from 59 years to 78 years for men and 61 years to 83 years for women. This number may potentially increase for each gender by approximately another four years before 2031. For some, this is way too long to live out an unhappy marriage.

#5. People hold marriage to a higher standard than in the past

Being a good provider or homemaker is no longer the measure of a successful marriage. People are looking for partners, companions, friends who share common interests, goals and values. They are looking for personal fulfillment. Marriage itself is not enough.

#6. Elderly disability rates have declined

People live well into their 60s and 70s feeling active and wanting to share their adventures with a like-minded partner.

#7. Women are less likely to be dependent on their husbands financially

Increased participation in the workforce is one reason. The other is that they feel more confident that they will receive half of the assets and wealth (in most jurisdictions) that they have built together in the course of the marriage.

#8. Different goals and aspirations

Many years of marriage are about raising children, building careers, establishing financial security, putting kids through college and falling into bed a night exhausted. This routine left little time for self-fulfillment. So as some couples enter retirement, they may find their future aspirations are entirely different. Given the many years of self-sacrifice, they see the next decades as a time to pursue what they want with or without their present spouse.

#9. Different approaches to money and spending habits

Money is still one of the main issues of contention for most divorcing couples. This subject applies to the Gray Divorce as well. As people enter their later years, they often become more set in their ways. Divergent approaches to saving and spending can be the root of much discord. Some just prefer to split things up and manage their own money as they set fit, without the interference of their spouse.

#10. The lack of intimacy or sex

Medical advances have allowed older couples to enjoy sex well into their later years. While this area of discussion can be uncomfortable for many, it is one of the main reasons marriages fall apart. Sexual intimacy is one of the few things that married couples share just between them and with no other person in their lives. Once this stops, many couples struggle to find what other glue holds them together.

#11. Empty nesters

Older couples find that after their adult children leave the family home, their marriage is no longer relevant. Many with troubled marriages will even stay together until the last child goes. They feel it’s easier for their sons and daughters to deal with divorce once they are on their own.

#12. Retirement

When one or both spouses retire, the abrupt change in lifestyle can negatively impact the marriage. Some retired couples find that the sudden increase in time spent together is not a source of happiness. They realize that they do not enjoy each other’s company and are in constant bickering.

What are the main issues in a Gray Divorce?

Like all divorces, several issues need consideration in the Gray Divorce. While most divorcing concerns fall under two categories; money and kids, the Gray Divorce presents a few other challenges that younger generations do not face.

Here are a few of the questions to consider in a Gray Divorce:

What to do with the family home or cottage?

Affordability post-divorce will be a driving factor in decision making. Often with long term marriages, many family traditions around the home or cottage hold memories and attachments that are hard to let go. However, keeping a property that will cause financial strain is not a good option. Putting emotional attachments aside, creating new traditions in new locations can be fun and rewarding. Think this through carefully and ensure the decision will stand the test of time financially.

Is spousal support an issue?

Spousal support is usually the most contentious issue in a divorce. For the Gray Divorce, it can be even more challenging. The potential payor is often approaching the end of their career. The payee may find job prospects very limited and going back to school unrealistic. In traditional marriages where one party stayed home, the negotiations can be emotional and bring up a lot of fear and uncertainty about the future.

Both parties must be very disciplined about engaging a process that protects their “rights.” It is necessary that it also does not harm future family events and grandparenting. Spousal support calculations and negotiations are not black and white. Ensuring you are in the hands of someone with knowledge of the laws and courtroom trends is important. Regardless, mediation is always the best choice.

What about ageing parents?

The issue of elderly parents is one area that is very specific to Gray Divorces. Often called the “Sandwich” generation, they still have dependent children as well as parents who are now reliant on them. Overlooking the impact of a divorce on the Grandparents often happens. They may be either financially dependent or physically dependent or both. Either way, a divorce can seriously put them in fear of what will happen to them in all of this. This matter needs to be considered very delicately with as little disruption to the elderly as warranted. Even if it means some give and take during negotiations. This scenario is another reason that mediation should be the method of resolution as there are just too many relationships at stake.

What is the market value of the assets?

Before splitting anything, establishing what the pie is before cutting it up is crucial to fair outcomes. While appraisals can be useful, they are often expensive and do not come with any guarantee. The best way to arrive at a number is for both parties to come up with a value by doing the research independently. For more complicated assets, like businesses or private equity, jointly hiring an independent valuer makes sense. Ensure, however, that this professional is retained by both parties to secure the feeling of neutrality. When it is time to receive the information and valuator’s opinion, do it together so that both parties hear it at the same time. Having a trusted mediator or resolution expert attend is good practice.

Don’t forget about addressing:

  • Stocks
  • Restricted Stock Units
  • PSU’s
  • Options (vested and not vested)
  • RRSPs
  • Private Equity
  • Art
  • Antiques

Are there any exemptions (non-marital assets)?

Exemptions are those assets, either in money, property, inheritances, art or others that do not form part of the property division. The discussion around exemptions needs to be thorough and well thought out. The issues are that in Gray Divorce cases are there’s often little or no paperwork to support pre-marriage assets or investments. In this case, a bit of give-and-take is of the best and most fair way to resolve the issue. If there is substantial paperwork or if it involves the Matrimonial Home, then the laws in each Province will set the stage for well-informed discussion making. In areas like this, where emotional buttons can be pushed, having a skilled mediator who can get you to the right outcome without damaging relationships is the best way possible.

Is either party collecting a Pension or still paying into a long-term pension?

The best course of action for any pension that is over ten years and is either a defined benefit plan or a defined contribution plan and where the Province does not have specific instructions and laws is to get it valued. There are several pension valuators in Canada, and the cost of having this done and understanding exactly how much can be transferred into the other parties LIRA is crucial before any decisions around divisions are made. In the case where a pension is already being drawn, then having an expert present your options is very important as it will directly impact financial division and spousal support payments if there are any.

What are the plans with regards to Life Insurance and Wills?

There are two areas often overlooked by Lawyers in Divorce Separation Agreements. The first is Life insurance, and the second is Wills.

Wills

As gray divorces happen later in life, there was likely an understanding, even if not adequately documented, about what would happen upon either spouse’s death. This can be a sensitive discussion, and both parties will likely be concerned about the entrance of a future relationship that may impact inheritances. It is essential to address these openly and honestly. It is hard to contractually guarantee what one person will put in their Will after divorce, but some wording and good intentions are always the best way to resolve this issue.

Life Insurance

Like a person’s Will, discussing who will be the future beneficiary(s) of an insurance policy is necessary. If possible, form part of the Separation Agreement’s terms around this decision. If an insurance policy is in place before the divorce, and if there is any cash value, this will usually form part of the marital assets. Even when there is no cash value, there should be a conversation about the face value that will pay out on death. Who will pay the premium, how will the insurance proceeds be divided, can the owner change the beneficiary at his/her own will? Answering these questions can save the family from a future hassle.

Do you have enough set aside to get your children through College/University?

The children of Gray Divorces are typically older than in most divorces. Education is not usually an issue as some will have put away money in an RESP that covers most expenses. But there may still be a shortfall. Addressing these expenses in detail makes sense. Having dependent children pursuing their first degree can add burden, both for school and child support. Take the time to plan.

What to do if one party is unhealthy?

If one of the spouses is facing a health issue, this can complicate the divorce. Along with the financial implications of one spouse’s health concerns, there will likely be emotional stress and fear. Usually, poor health alone is not a reason for a divorce. Sometimes poor health is a result of one spouse not taking care of themselves. This issue sometimes causes anger and bitterness and may need a bit more give and take. Regardless, avoid fighting it out through lawyers. Court appearances are the last places to resolve marriage breakdown issues.

What is the Best Way to Resolve the Issues?

If you need help with understanding the process of mediation and divorce, please contact Fairway Divorce Solutions. We are here to help you navigate these changes in your life. Call today!