Senior Gray Divorce in California: Legal and Financial Issues After Age 55

According to U.S. Census Bureau data, 34.9% of divorces involve couples age 55 or older. For more than 40 years, I have represented clients of all age groups. As a senior myself, however, I now bring an even deeper level of empathy and purpose to representing older adults facing divorce.

Divorce is difficult at any stage of life. Divorce after age 55 can be especially devastating, both emotionally and financially. The golden years that many couples planned and worked hard to enjoy can suddenly be overshadowed by uncertainty when divorce arises later in life.

Social scientists have observed that so-called gray divorces often occur after children leave home and couples realize they no longer share the same sense of purpose or common interests. Many senior couples envision growing older together, caring for one another, and perhaps receiving help from family if needed. Divorce can abruptly change that future. My role is to help senior divorce clients reassess their circumstances and develop a sound legal and financial strategy for the next stage of life.

In California divorce cases, community property and community debts are generally divided equally. However, one half is not always equal in practical value to the other. For example, an asset that carries future tax consequences, costs of sale, or rapid depreciation may be far less valuable than an asset with the same apparent value but without those burdens.

The same is true of debt. Two obligations with the same face amount may not be equally harmful. A debt that can be negotiated or, if necessary, discharged in bankruptcy may be far less burdensome than one that cannot.

For that reason, proper property and debt division is especially important in senior divorce cases. Unlike younger adults, many seniors do not have decades to recover from the financial effects of an unfavorable divorce settlement.

Emotion can also create significant expense in divorce. One of the most important assets in many cases is the family home. For many seniors, sentimental value is a real consideration. The desire to keep a longtime family home for visits with children and grandchildren, and to remain in a familiar neighborhood with longstanding friendships, can be deeply meaningful. At the same time, I must counsel clients not to overvalue sentiment at their own financial expense.

Conversely, simply agreeing to sell the home without careful analysis may also be a mistake. Selling a home often involves substantial costs, including repairs, inspections, upgrades, and real estate commissions. These expenses can significantly reduce the net proceeds.

Even after the home is sold, the financial reality can be difficult. Whether a client later rents or buys another residence, many are shocked by the dramatic increase in housing costs compared with the relatively low monthly expenses they had in a longtime mortgaged or fully paid-off home.

Recovering financially from divorce after age 55 can be especially difficult because many couples have already reached their peak earning years. Income may be fixed or limited, and employment opportunities often become more restricted with age.

Other common financial issues in senior divorce include the division of securities, pensions, and retirement accounts, as well as the tracing and characterization of separate property that has been commingled with community property.

Another major issue in senior divorce is spousal support, also known as alimony. After the division of assets and debts, one of the court’s primary concerns is whether, and to what extent, support is appropriate under California law. While that may sound straightforward in the abstract, each case is highly fact-specific. As a result, a substantial body of law has developed regarding spousal support.

In the Bay Area, many couples already find it challenging to maintain their lifestyle while living together under one roof. After divorce, those same resources may have to support two households and two sets of living expenses. Maintaining the marital standard of living may become extremely difficult, and the parties’ interests can become sharply opposed. Spousal support should therefore never be treated lightly. A mistake in this area can cause serious financial hardship at a stage of life when hardship can be especially damaging.

These are only some of the issues that commonly arise in senior divorce cases. If you would like to discuss these or other legal issues relating to divorce, please feel free to contact me.

Child custody and visitation issues arise less often in senior divorces. Nevertheless, they can still affect seniors, including in matters involving grandparent visitation or custody. I will discuss those issues in future articles.

For now, below are answers to a few frequently asked questions I receive from seniors about divorce.

Are Social Security benefits divided between spouses in a divorce?

No. Social Security benefits are not community property and are not divided in a divorce. However, Social Security issues often arise in senior divorce cases when the court evaluates income for spousal support purposes. Both direct Social Security benefits and derivative benefits may therefore be relevant to the support analysis.

My spouse was the only one who earned a pension or contributed to retirement plans during the marriage. Will I be entitled to any of those benefits after divorce?

Yes. Unlike Social Security benefits, pension and retirement benefits earned during marriage are generally community property and are subject to division in divorce. In addition, income from pension benefits may be considered in the court’s spousal support analysis.

I recently retired. Will the court set spousal support at the same amount as if I were still employed?

Generally, if you are around age 65 or older and have retired in a typical manner, the court will not automatically calculate spousal support as though you were still working. However, the outcome depends on the facts. A court may view earlier retirement differently, particularly where a person retires at a younger age, such as in some military or public safety careers.