31 Mar Divorce at an Older Age in California
According to a report in the New York Times, the annual figure of so called “senior couple” divorces, or gray divorces, is likely to rise to around 800,000 within a decade when the percentage of the U.S. population that is over 50 will reach a peak. The divorce rate across North America has actually been declining for several different reasons, but the divorce rate amongst seniors has doubled since 1990.
When older people divorce in later life it involves a different set of problems to that of younger divorcees. There is less worry about children, for instance, many of which have already grown up and become financially independent, or at least are of an age where there may be only a few years of dependence left. The main worry is financial. Unless both spouses are more or less equally well off just before or at the start of retirement, it is likely that one or both could be facing a bleak financial future after divorce.
As in any other divorce, if it is hard to sort out affairs on separation after many years of marriage, it may be best to turn to an experienced family law attorney for advice. In some cases, the Family Law Court may need to be used to make a decision about asset distribution if there seems to be an impasse over how to divide property and other assets like pension funds.
California law on asset distribution following a divorce
California’s divorce laws mean that any property which has been acquired during the marriage is considered community property. The only exception is an inheritance which is considered to be the property of the spouse who inherited it. Also, any assets or property that was owned by one or the other of the couple prior to the marriage is considered to be the property of that spouse.
All other assets, whether they are bank accounts, stocks and shares, the family home, other property, pension funds (except Social Security) are all considered to be “community” or shared assets and if left to the Family Law Court will be divided so that 50% goes to each spouse after divorce. Of course, if the couple come to an amicable agreement without the need to turn to the Court, whether with the help of an attorney or not, this is quite acceptable.
Division of retirement funds
Most gray divorces take place either not long before retirement or after. If one or both have accumulated retirement funds from a private retirement fund scheme, or one that has been contributed to while employed, then there can be doubts about how the funds should be divided if the couple decides to separate and have a divorce. In California law, any of these types of funds are still considered “community” property and there is a method used to determine who gets what after a divorce if there is no agreement made between the two people who are separating.
The Court may decide that the funds are allocated after retirement in such a way that each spouse gets a proportion of each check by using a formula to decide the amount. Basically, the formula takes into account the number of years of marriage and the number of years that the pension scheme has been funded. For example, if a couple have been married for 30 years but the person whose retirement scheme it is has been contributing to it for 40 years, then the other spouse will get 30/40, i.e. three quarters of half of each check.
This way of distributing a pension fund may be substituted by a buy-out system. In a buy-out scheme, the Court calculates the value of the pension fund and allocates an amount to the other spouse. This amount comes from community property such as a share of the house when sold and other joint assets in proportion to the amount they are awarded. The spouse whose fund it is then gets the full amount of each check when the fund matures.
Divorcing at an older age may not have the worries and concerns about what to do about dependent children, but there are usually more concerns about whether there will be enough to live on comfortably after separation. The fact that an older couple has fewer years of remaining employment or money making activity left, if any, make it more important that decisions about their divorce are made carefully with due attention to each spouse’s needs. If you live in Orange County and are worried about an impending “gray divorce,” you are advised to seek the help of a family law attorney at the Law Office of Damian Nolan in Orange County, California at 562-634-1115.