Grey Divorce in Australia

While divorce rates in Australia have dropped in recent decades, there is a growing trend in so called “grey divorces” for couples over the age of 50. Increased life expectancy, changing social norms and financial independence have led more couples to separate later in life, even after many decades of marriage.  Of course, when an older couple divorces, the legal dissolution of the marriage is carried out like any other divorce. However, the untangling of mutually held assets, superannuation and estates can be particularly difficult when a couple have been together for decades, or are nearing retirement or assisted living age. This article examines the unique issues involved in grey divorces in Australia, and why it is crucial to seek experienced legal advice in such cases.

Causes of grey divorce

Many factors have been identified as contributing to the grey divorce trend in Australia. With medical advances and healthy lifestyle choices, people are living for much longer. Many people over the age of 50 are still looking forward to decades of active and fulfilled lifestyle and are less willing to stay in unhappy marriages into their golden years. Divorce is also more socially acceptable, including for older couples who have been together for a long time. There is a much greater acceptance of the idea that individuals should seek happiness and fulfillment, even if that means ending a long-term relationship. Some couples find that they no longer have anything in common after their children are grown. Perhaps most significantly, more women than ever have their own careers and financial independence and can leave marriages without fearing for their financial future.

Legal framework of divorce in Australia

In Australia, the Family Law Act 1975 governs all divorce proceedings, regardless of the age of the couple or how long they have been married (although couples who divorce after very brief marriages must meet additional requirements). The no-fault divorce system requires only an irretrievable breakdown of the marriage, demonstrated by a minimum separation of at least 12 months. While the age of the applicants does not impact the couple’s eligibility for divorce, it will probably effect the separate property settlement and spousal maintenance proceedings.

Couples with adult, independent children will probably find parenting arrangements are not a primary legal consideration in their separation. However, extended family dynamics can still play a role in proceedings, especially in the division of family assets and estate arrangements. The primary issue in grey divorces is the division of finances and property. When couples divorce later in life, the property settlement usually must account for the impact on retirement plans, housing security and future financial stability.

Division of assets

A significant factor in grey divorce is that fact that older individuals usually have limited capacity to regain their financial position after a divorce. When the Federal Circuit and Family Court of Australia presides over a property settlement matter, it aims to make an equitable, though not necessarily equal, division of assets. In this assessment, the most important factors are the duration of the marriage, the financial and non-financial contributions of both parties to the relationship, and their future needs.

Grey divorces often involve the division of substantial financial assets such as:

• Real estate: many grey divorcees have substantial equity in their home, entirely paid off mortgages, or even investment properties
• Investments and Savings: Couples in long marriages often have shared investments, stocks, shares and other financial assets that require careful division
• Retirement funds: Superannuation is often the largest asset class for an older couple. The accumulation of superannuation can be influenced by a number of factors, including the time that each spouse has worked outside the home. To redress any inequity in the amount of superannuation held by each party, it may be necessary for superannuation funds to be split between the spouses. Depending on the age of the individuals, the couple may have to reconsider their retirement plans or postpone retirement following grey divorce.

Spousal maintenance

Spousal Maintenance is a form of financial support awarded to one party if they cannot adequately support themselves after a divorce. It is important to note that spousal maintenance is not automatically allocated: rather, the party seeking the maintenance must be able to demonstrate a clear need for financial support. In grey divorces, maintenance can be appropriate if one spouse (often the home maker) would face difficulty in the workforce because of age or ill health. The Court assesses spousal maintenance claims based on the following factors:

• each spouse’s income and earning capacity
• each spouse’s age, health and medical needs
• each spouse’s financial and non-financial contributions to the marriage.

Spousal support can be a vital issue in grey divorces, especially if one spouse has been out of the workforce for an extended period of time. Spouses in long marriages often receive substantial maintenance payments, particularly if they were financially dependent on their spouse. However, maintenance is not intended to be a permanent arrangement, but a way to allow one spouse time to retrain or undertake further education so they are able to support themselves in the future.

Estate planning

With grey divorces, estate planning is also a key consideration. After divorce at any age, a couple should review and update their wills, their nominated superannuation beneficiaries and powers of attorney to reflect their changed circumstances. This is particularly vital for older couples with more complex family and financial arrangements.

Grey divorce is a growing trend in Australia with distinct challenges and considerations. Older couples must navigate issues including complex asset division, superannuation splitting and spousal maintenance. Go To Court Lawyers can provide advice to help you through this difficult process. Reach out today on 1300 636 846 for experienced legal assistance and representation.