Getting divorced or ending a relationship can be difficult at any stage of life, but it presents unique challenges for older adults.
We know that the median age for divorce has been increasing since the early 1980s1 and this, combined with the trend for couples to marry later in life, has led to a growing number of people who find themselves facing the unchartered territory of divorce or separation as an older adult.
Here are four key considerations if you’re thinking about divorce or separation later in life:
1. You might be entitled to (or have to pay) spousal maintenance
One of the first things you will need to think about is how you will support yourself. As well as dividing assets with your former partner, you may be able to seek spousal maintenance. If you are unable to support yourself, and your former partner has the capacity to financially support you, they may be required to pay you spousal maintenance. Remember though that spousal maintenance is not an automatic entitlement following the breakdown of your relationship. When deciding whether to order spousal maintenance the court will look at a broad range of factors including, but not limited to, the age and state of health of each person, the duration of the relationship and how this may have impacted a person’s earning capacity, and their capacity to obtain gainful employment.
2. Your superannuation could be divided
Superannuation is now a significant asset for many older adults. The superannuation legislation in Australia enables you and your former partner to split your superannuation benefits between you2. This can be done by written agreement or you can ask the court to make an order. The court will aim to divide superannuation benefits in a way that is fair and equitable to both parties.
If you do not know how much superannuation your former partner has, you can apply to get this information from the trustee of their superannuation fund.
It is also important to remember to revoke any Binding Death Benefit Nominations you may have signed in favour of your former partner and execute a new nomination to reflect your desired beneficiaries. Your superannuation fund will be able to help.
3. You’ll need to rethink your retirement plan
Your dream retirement may no longer be a reality so give priority to thinking about how your new circumstances have affected your plans. Divorce and separation can have a significant impact on your financial security and as an older adult you may also have less time to rebuild your wealth. It is likely that you will have to divide assets that you have built over many years, including your home, retirement savings and investments. We encourage you to consider getting advice from a financial planner who can help you understand your retirement planning options.
4. Your will and estate plan should reflect your new circumstances
The change in your personal circumstances can also affect the terms of your Will, Enduring Power of Attorney and Advance Health Directive. Be sure to make the time to think about whether you need to adjust your estate planning arrangements including whether a standard Will is sufficient, or if you need a Will with a testamentary trust to help you maximise asset protection and minimise taxation obligations. It is best to make informed decisions that will benefit you and your family in the long run.
What's next?
Adjusting to your new living arrangements, changes in your social circumstances and the financial realities can be hard to accept. While every relationship is different, it is important to be realistic about your expectations.
Understandably, you may have a lot on your mind right now. If there’s anything you’re not sure about, we can help you understand your rights and responsibilities and even help you negotiate a settlement with your former partner. It is important that you seek professional advice to guide you through the process.
We invite you to get in touch with our expert team of family law and estate planning lawyers.
1 There are some very limited circumstances where superannuation is unsplittable. For example, very small balances where it would not be costs effective or commutable pensions or annuities of very low value.
2 Divorces in Australia, Australian Institute of Family Studies
