Due to their older age, the participants in a gray divorce tend to have higher net worth and more assets than a younger couple would. That means questions about dividing financial and other assets as well as alimony are more complex and involve more money. In addition, the whole legal process typically costs more.
Dividing assets in a gray divorce
Advanced financial assets can be difficult to asses and divide. For example, high-value, tax-advantaged retirement accounts like IRAs and 401(k)s can create large tax burdens if they need to be split because they may be treated as income. Investment assets like stocks and bonds held in brokerage accounts can also create tax implications if they need to be liquidated in whole or in part. Vacation homes and other real estate can be challenging to settle as well.
Working out the best ways to set the value of various assets against each other to create a compromise that works for both parties can take a long time, and that time adds up to more legal fees. The goal is to successfully navigate through these issues and arrive at a divorce settlement while minimizing costs. Strategies like using a paralegal for many of the billable hours and having a separate lawyer to handle contested vs. uncontested divorces may save the clients a lot of money as well as accelerate the process.
Gray divorces are often more complex to handle because of the more numerous assets involved. Couples who are divorcing during or near retirement need to be aware of these extra complexities and develop a strategy to complete the legal process in as efficient a manner as possible.