With people living longer lives, gray divorce has risen to its highest level in U.S. history. Around 36 percent of Americans getting divorced are 50 or older, a rate double what it was in the past two decades.¹

Divorce later in life brings many layers of complexity. As a CAPTRUST advisor with expertise in the emotional side of transitions, I’ve seen some client patterns and pitfalls that can be helpful to know when serving as a trusted financial guide during this life event.

Building the Foundation for Smart Decisions

The cornerstone of supporting someone through a gray divorce is the ability to listen closely to their concerns. If a client is struggling with the situation, you have to help them get to a place of emotional intelligence in order to make weighty decisions.

A new client blindsided by divorce might come to you very early in the process with a list of uncertainties: “I can’t concentrate. How am I going to run my practice? Who’s going to get the house? How am I going to tell the children?”

It’s crucial to allow them the space to tell you those things, so you can capture them and organize them into the categories of tasks for “now, soon, and later.” Sometimes I’ll even color-code them. It slowly allows them to breathe.

When you first come to terms with getting divorced, it’s like someone pulled the rug out from under you, and you have to start all over. This “now, soon, later” planning process makes the client feel like they can regain control because there is a plan.

Just a side note, one of those “now” items is to check beneficiaries and be aware of the fact that 26 states automatically revoke a former spouse as a beneficiary on some accounts. If they do want their ex-spouse to continue to be a beneficiary, the client has to update the language to be specific: “my ex-spouse, John Doe.” Ideally, a new client comes to you before the divorce settlement is final so you can help coordinate the details with their attorney.

Pitfalls to Watch for in Gray Divorce

Many of the issues around divorce result from a disparity between income and education. One of the partners is going to be more financially literate, one is going to have more potential for future income flow or be more employable. One might have accumulated more debt than the other, and that may cause resentment when they split.

With divorce later in life, there are more assets at stake, and typically families are larger, so more people become involved, and complex family dynamics come into play.

Caregiving then becomes an open question. That person pictured that they would have support from their partner as they aged, and now they may have to tackle that on their own.

Long-term disability and long-term care insurance may be more necessary yet too expensive at a later age. The adult children become anxious because they feel it’s now their responsibility. As the advisor, the client will look to you to create a financial plan that considers caregiving costs and long-term stability.

Creating a Network of Support

The people especially at risk when divorcing later in life are those who have issues with mental or physical health, or those prone to social isolation. Loneliness has been linked to an increased risk of a host of illnesses, from depression to dementia.

Here is where your resources and referrals come in. As the advisor, you should be the connector. Build a referral network that includes a licensed therapist, estate attorney, downsizing specialists—it’s good to have an arsenal of outside resources.

Have the Re-partnering Discussion Early

When a client is newly separated, and they’re going through the divorce process, keep in mind the importance of talking about re-partnering early on. It sounds counterintuitive, but there may be financial implications to re-partnering if alimony is involved, as well as risks to financial well-being.

While everything that didn’t work in their previous relationship is fresh in their mind, have them tell you what they did and didn’t like so you can memorialize it. Often when people partner up again, they go back to the exact situation they were in because it’s familiar. In my observation, women are less apt to do that because they have more of a social safety net to rely on.

However, I’ve seen a troubling pattern of when a woman will re-partner quickly for security reasons. They might sell or give up the home they were given in the settlement to move in with a new partner. Then that new partner becomes ill and needs caregiving.

So now that woman not only becomes a caregiver for someone they don’t know well, but she also has nothing to fall back on; she’s given everything up. That’s why these re-partnering conversations are crucial.

The Skills Needed to Navigate the Transition

My training as a Certified Financial Transitionist (CeFT^®) helps immensely in navigating gray divorce situations. It equips me to identify clients’ emotional states—confusion, hopelessness, withdrawal—and tailor my approach accordingly.

Beyond the “now, soon, later” framework, my understanding of the transition stages, from anticipation to the “new normal,” helps me guide clients along the emotional rollercoaster. I make a point to celebrate milestones along the way.

I’ve also learned that the inclination to immediately fix things is often not helpful. A financial advisor’s urge to jump straight to technical solutions and jargon can overwhelm clients. Letting your own biases creep in is also a danger because everyone’s situation is different.

Again, active listening is key. Clients are the experts in their lives. Start by asking what they need for support. Explore their recent experiences with “What has life been like lately?” My core questions then become: “What do you want to protect? What can you let go of? What ‘new’ needs to be created?”

Early in my career, I’d host seminars with women. Their primary fear used to be, “I don’t want to be the bag lady.” Now it’s “I want quality of life.” We have transitioned as advisors. It’s less about the money. It’s more about how we live with the money. And we have to learn how to have those conversations.

Source:

1.     American Psychological Association. “More Couples Are Divorcing after Age 50 than Ever Before,” November 2023.

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