Jim Reed Discusses the 'Gray divorce revolution' in The Indiana Lawyer
Are you aware of the new divorce trend in the United States? It’s called “gray divorce,” and BGD partner James Reed shares some insight into the phenomenon in his new Indiana Lawyer column.
What is Gray Divorce?
Reed explains that in a gray divorce, each spouse often leaves the marriage with a grouping of assets unlike any other age group getting divorced. The family situation has changed dramatically and the “gray divorcees” are in the midst of a completely changed or changing lifestyle.
In addition, there is less time to make any kind of financial rebound because the remaining time for significant earnings is short, according to Reed. The financial planning previously done for the joint husband and wife retirement is out the window or under serious renovation. Estate planning for “us” is now estate planning for “me.”
According to Reed, the divorce rate of Americans within this age group has doubled since 1990. In fact, some estimate that by the year 2030 there will be 800,000 gray divorces annually.
A New Trend
This divorce trend can present unique challenges for legal and financial planning professionals when it comes to estate planning for clients. Reed says, “Even once a plan is in place, these clients require more frequent review and possible plan adjustments than do your more traditional planning clients.”
It is important to consider having a premarital agreement to protect one’s assets and define responsibilities in the event of a divorce. There is also a cohabitation or “no nup” agreement available for those looking at a non-marital living together relationship. Either way, Reed says, “Both agreements can avoid unintended consequences which may be imposed by law without a clear contract.”