James Reed Discusses How the “Gray Divorce Revolution” Alters Traditional Estate Planning
BGD attorney James Reed discussed how the “gray divorce revolution” alters traditional estate planning in his latest Indiana Lawyer column.
Reed explained that a “gray divorce” refers to the divorce of an American couple over the age of 50. Gray divorces are occurring at a record rate, so much so that it has been estimated that by the year 2030 there will be 800,000 gray divorces annually. Therefore, this staggering statistic has lead social commentators to call this a “gray divorce revolution.”
In a gray divorce, Reed explained that the family situation is often in the midst of a lifestyle change. Thus, each spouse tends to leave the marriage with assets that are far different from members of any other divorcing age group. This is because these families are older with grown children who often already have families of their own.
In addition, the financial planning previously begun takes a dramatic turn. The joint husband and wife estate planning is no longer about “us,” but about “me.” Reed pointed out that, because of this, it is wise to employ a skilled financial advisor during the divorce. They can provide invaluable counsel when figuring out what assets are better to take in the property settlement and work to develop a budget for upcoming expenses.
At the time of the gray divorce, estate planning will likely need to start from scratch. For that reason, divorcees should consider interim estate planning to cover the time before the divorce is final. If not done already, the client also needs an immediate inventory and review of all existing planning documents. For example, planning for one’s own care is critical. Reviewing any powers of attorney and life insurance is highly recommended in order to have an effective plan in place post-divorce.
In summary, Reed explained that estate planning with the gray divorcee client requires a thoughtful and deliberate approach due to unique circumstances. Even after the plan is finalized, gray divorce clients require more frequent review and possible plan adjustments than the more traditional planning clients.
Read “Reed: ‘Gray divorce revolution’ alters traditional estate planning” in its entirety on the Indiana Lawyer website.
To learn more about James Reed and his practice, please visit his profile.