Divorce over 60 - an increasing trend
Divorce in the “third age” - Part One
Perhaps soon there will be some academic research by a sociology department at a distinguished university to ascertain why it is that so many more couples are divorcing at an age when, traditionally, it would be expected that they would be preparing to settle down for the “golden age” of retirement.
Divorce over 60 - an increasing trend
Certainly, family lawyers notice the increasing trend for older couples to separate and/or divorce. Statistics show that in the 10 years to 2013, the number of marriages breaking down where both parties were over 60 rose by 33% and the number of men over 60 divorcing soared by no less than 73%.
There are a number of reasons for these changes, not least the current regard, particularly in the west, for the “youth” culture. Whatever the causes, the effects and most particularly the legal implications, of a family breakdown late in life can be enormous and often distinctly different from those which confront a couple at a younger age.
Just some of the practical problems can be highlighted:-
- The length of time that one or both marriage partners have until retirement is likely to be much shorter: This means that the future earnings potential until retirement is, by definition, reduced. There is less (often much less) time and ability for the parties to re-build the financial resources which they may have had as a married couple. This includes the very important value of pension funds which are likely to be split, resulting in a smaller pension income for both parties.
- In most cases the house shared by the married couple has to be sold when a divorce occurs at a later stage in life (assuming that there are no longer children at home who have to be supported). The funds available from that sale will need to provide homes for each party, almost inevitably leading to a reduction in the quality of housing. Obtaining a mortgage in later years is often more difficult and sometimes impossible.
- Unless there are exceptional circumstances, the overall financial resources will be divided equally between the former spouses. There will have to be discussion (and possibly disagreement) as to how those resources are to be divided. That might, of course, happen even if separation occurs at an earlier age but, later in life, inheritances will often have been received already, with nothing more to come from that source.
- Personal possessions which, for example, have been inherited from parents or even grandparents and which, but for the divorce, would have passed to the surviving spouse and then to children, might now be the subject of argument in the divorce or may even have to be sold.
- Assets such as holiday homes, boats, art, vintage cars, stamps or any other collection of value can all cause real difficulties. If, for example, the holiday home is in the name of only one of the parties to the marriage but the couple have been using the home, either together or even separately and both feel attached to it and wish to continue to have it available to them, some painful decisions will have to be made.
- Thought has to be given as to what is to happen to assets, be they investments or possessions, on the death of the legal owner. The asset may have been left in the hands of the non-legal owner but its ultimate destination will need to be clarified.
- One of the parties may have formed a new relationship and wish to live with another person. That is likely to be relevant because the financial position of that other person may well make a difference to the financial commitments of the divorcing marriage partner. For example, if that other person owns a house and the divorcing partner plans to live there, that divorcing partner will not have any capital requirements for accommodation expenses.
- Most people have some sort of pension provision, sometimes of modest value but it might be very considerable. When a divorce occurs, the law requires that the parties are put on an equal footing so far as pensions are concerned. For couples close to retirement, there is a shorter time to build up the value of pensions and so there will be much less available by way of income from pensions for each of the two households after divorce.
- Now that, after the age of 55, there is free access to pension funds (subject to payment of the relevant tax charge), a matter of principle can arise on divorce as to whether the pension funds, or part of them, should be used for immediate financial needs (e.g. towards the purchase of a house) or preserved for the payment of a pension at a later date. This is a delicate matter upon which expert advice is essential.
- Businesses and, most particularly, family businesses can be the source of real difficulties, particularly if owned by only one spouse. A valuation of the business may well be required.
Alternatively, one spouse may have a minority share in the business, and decisions have to be made as to whether both spouses can continue after divorce to have an interest in that business – a potentially difficult situation particularly if there is conflict between the parties.
Sometimes a family business is owned jointly by each of the marriage partners and both may work in it. In addition, one or more of their children may also work or even part-own the business.
It is rare (but not unknown) that both partners want to continue working in the business after divorce and in that situation a solution about the future of the business has to be made.
Sometimes assets have a particular significance with one of the marriage partners. Family businesses fall into this category as do farms and long-held family homes or estates.
These and many others are aspects of the practical financial arrangements that have to be considered in divorce settlements. There are also the non-financial issues that must be taken into account. We will consider these in Divorce over Sixty - Part Two.
For more information or some preliminary, confidential advice, please contact Simon Thomas, Head of the Family Team by telephone +44 (0)1392 687630 (direct line) or by email firstname.lastname@example.org