“Gray divorce” refers to divorce among older adults. Often near or past retirement, they may be less able to weather financial setbacks in divorce because they are likely not earning enough income to make up for it. It is important that older couples enter negotiations over property division or head into litigation understanding their marital finances and knowing what their financial needs will be in their post-divorce life.
For example, some people have few liquid assets and might need to prioritize building up an emergency savings fund of 6 to 12 months. Some parents or grandparents may want to make sure that they are able to offer financial aid to their children or grandchildren. Others may want to change their lives completely, setting out to better their community, start a foundation or travel the world. Each of these will require different financial strategies after divorce. People should be particularly aware of the rules for the division of retirement accounts. These differ according to the type of account that is being divided.
Once the divorce is final, there are still some tasks ahead. People might need to revise their estate plan. If one spouse was carried on the other’s health insurance, they will need to find a new plan. Assets that have changed ownership may need to be retitled.
In Tennessee, marital property is supposed to be divided equitably. This is separate from community property states, where divisions are supposed to be equal, and may give the couple more latitude to negotiate an agreement that works best for them. One spouse may also be required to pay support to the other. If the couple cannot negotiate an agreement out of court, they may have to go to litigation. While this can be more costly than negotiation, it might be necessary if one spouse is uncooperative.