Issues that are unique to divorce after age 65 generally involve the difficulty of recovering financially when divorce happens so late in life, the emotional loss after decades of marriage, and the loss of a lifelong caregiver while aging.
Many couples are without a formal plan for aging, but assume they will either age in place, potentially downsize or choose a Continuing Care Retirement Community. Perhaps there is an intermediate transition to Florida or other warm-weather state before making a final move to be near family or friends or a lifecare community.
Long Term Care & Your Aging Plan After Grey Divorce
In preparation prior to contemplating divorce, was the couple fortunate enough to purchase long term care insurance? The premium obligations should be considered in a settlement agreement. Note that previously issued policies will likely see premium increases every few years, so the settlement mechanism should plan for higher costs. Policy options can include coverage for custodial nursing home care and/or home care. There are fewer insurers offering this coverage now, and previously issued policies are much more valuable because of the difficulty of qualifying for new coverage. New coverage premium costs increase with age so attempting to replace a previously issued policy will be cost more.
In the best of circumstances, divorce upends any informal or formal aging plan. The financial funding for lifestyle support and aging support is now reduced to half. There is also the loss of a lifelong caregiver. Adult children who may have been willing caregivers for both parents may now feel conflicted and unwilling or unable to commit to that obligation post separation.
Caring for Older Adults During COVID-19
The pandemic that has swept the world now changes assumptions about caregiving in general. This will very likely be repeated. The transmission of infection increases the vulnerability of aging alone more pronounced without supportive communities, trusted caregivers or family nearby. In the best of circumstances, the divorce process will properly address the future financial needs of both parties assuming they remain healthy. The “new normal” of episodic pandemics should increase the awareness of divorcing parties as to the financial resources, family involvement and realistic relocation options of the aging parties following separation.
About Jeff Metz, MT, CFP, CDFA
Jeff is a Certified Financial Planner and Senior Financial Counselor at RTD Financial Advisors. Jeff has a Master in Taxation degree from Villanova Law School, with a special certificate in estate planning. Jeff is a member of the Financial Therapy Association. Jeff can be reached at email@example.com.