Reviewed by Dominic A. Tomaio, ESQ.
Key Takeaways
- A gray divorce involves spouses age 50 and older, focused on alimony and dividing retirement and marital assets rather than child issues.
- A marriage of 20 or more years can support open durational alimony in New Jersey.
- Retirement accounts are divided by equitable distribution, which is fair but not automatically 50/50, and usually requires a QDRO.
There are many kinds of divorces. One that has become more common is a gray divorce, which is used for couples over the age of 50. Because these couples generally do not have to consider matters related to child support or custody, most of the issues during the divorce are related to alimony and dividing marital and retirement assets. It’s also important to understand that, in New Jersey, marriages of 20 or more years could result in open durational alimony, and marriages lasting at least 10 years are often eligible for Social Security on the other spouse’s earning record. Do not hesitate to reach out to our attorneys today to discuss your case with our skilled legal team.
What Is a Gray Divorce in New Jersey?
A gray divorce is a divorce that happens with couples over the age of 50. Because this type of divorce has increased in recent years, these divorces are given a specific name. Gray divorces are distinguishable from other kinds of divorce because couples over 50 may have to deal with certain issues that other couples are unlikely to have to face. For instance, some couples may be ordered to pay open durational alimony. Furthermore, most of these couples will not have to worry about child custody or child support.
What Are Common Issues That Are Addressed in a Gray Divorce?
Because gray divorces occur during the later stages in a couple’s life, there are several issues that are addressed in these types of divorces. As previously stated, gray divorces typically deal with issues that other kinds of divorces do not. Some of the most common issues that come up in a gray divorce in New Jersey include, and are not limited to:
- Establishing whether inheritances can be divided
- Alimony negotiations when one spouse is collecting Social Security off of the other’s earnings
- Determining alimony duration, frequency, and amount
- Determining marital property vs. separate property
- Whether or not a new life insurance policy is needed
- Dividing pension plans or other retirement accounts
- Whether or not they are required to pay for their children’s college education through child support
Dividing Retirement Accounts in a Gray Divorce
In general, couples getting divorced later in life typically need to consider matters like retirement accounts, including 401(k)s and pensions, which are often the largest marital asset.
For couples divorcing later in life, retirement accounts such as 401(k)s and pensions are often the largest marital asset, so how they are divided matters a great deal.
- Only the marital portion is divided: Contributions made before the marriage are generally considered separate property, though contributions and appreciation are considered marital property and therefore subject to equitable distribution. Essentially, the marital period runs from the date on which the marriage occurs to the date on which the divorce complaint is filed.
- Equitable does not mean equal: New Jersey divides marital property in accordance with the equitable distribution standard as defined in N.J.S.A. 2A:34-23.1. This statute weighs a number of factors to reach a fair agreement. It’s also important to understand that there is no automatic rule that grants each party a 50% split of assets. A fair division may be ruled as equal, but the court can also find that a 60/40 split is also fair based on the circumstances.
- A QDRO is usually required: To divide retirement plans, the court may implement a Qualified Domestic Relations Order, which requires the plan administrator to name the non-employee spouse as an “alternate payee,” and complies with the federal Employee Retirement Income Security Act (ERISA). A properly drafted QDRO can also allow the transfer to happen without the hefty early-withdrawal tax penalty.
Social Security and Longer Marriages
A point many older divorcing couples overlook: if the marriage lasted at least 10 years and you are currently unmarried, you may claim Social Security benefits based on your ex-spouse’s earnings record, worth up to half of their benefit at full retirement age. You receive the greater of your own benefit or that amount, not both, and claiming it does not reduce your ex-spouse’s benefit.
What Is the Benefit of Mediation During a Gray Divorce?
When couples go through a gray divorce, many of them choose to go through the process of mediation for many different reasons. The first is because divorces are known to take time. A divorce can take years, and couples at these ages may not want to spend their time divorcing through litigation. Mediation is typically a faster process.
Another reason is that divorces can be stressful, and at an older age, individuals may be facing other stressful issues such as medical concerns, their jobs, caring for elderly parents, supporting their children, etc. Mediation can be a more peaceful process that can reduce some of the stress of the circumstances.
Finally, divorces can be expensive. Spouses at a later age may either be retired or planning to retire soon. Instead of spending money on litigation, they may attempt to protect their retirement funds by utilizing mediation. Mediation is generally a faster, more economical process.
Contact Our New Jersey Divorce Firm
If you have questions about mediations for a gray divorce, do not hesitate to reach out to Townsend, Tomaio, Newmark & Clancy today to discuss the specifics of your case and your options. The experienced legal team at Townsend, Tomaio, Newmark & Clancy L.L.C is ready to assist you during these difficult times. Contact us today to learn how we can represent you during these complex matters.
