It’s never too late to start a new chapter in life. This philosophy has seemingly taken hold among Americans over the age of 50, who are experiencing something of a divorce boom. The “gray divorce” rate, as it is often referred to, has gone up in recent years.
While a separation might be the right move for both parties, there are financial consequences that can bleed into another important aspect of life: your estate plan.
How gray divorce complicates estate planning
A recent survey captured some of the current trends impacting estate planning. Divorce among those over 50 was one of the key elements creating waves, according to the survey. It highlighted three key areas of estate planning affected by gray divorce:
- Sorting out who will be responsible for enacting power of attorney
- Understanding Social Security benefits
- Drafting a will
Family conflict and finances
The survey also highlighted two specific complications stemming from divorce among older Americans.
One is the potential for increased family conflict. For many, the goal of an estate plan is, in part, to prevent (or at least minimize) disagreements between loved ones. A divorce can amplify certain emotions and open the door to confusion or frustration.
The second complication is money. While a divorce impacts every couple’s financial situation, it can be even more pronounced among older adults. An individual’s cost of living goes up, health care expenses may rise and retirement plans can look vastly different once the separation is finalized. These changes can all impact how you craft your estate plan, including things like asset protection, advance directives and beneficiaries.
All of these findings underscore the importance of reviewing and updating your estate plan – particularly after significant life events such as divorce. Doing so can mean the difference between tranquility and turbulence.