High-Asset “Gray” Divorces

 Posted on March 06, 2020 in High Asset Divorce

When we think about “gray divorce” in Austin, Texas, we often consider studies that suggest older adults will face more financial difficulties if they decide to file for divorce. However, it is not as common to consider gray divorce in the context of a high asset or high net worth divorce. If a couple has accumulated substantial assets during the marriage and has multi-million dollar investments, does gray divorce really pose the same types of financial risks as a gray divorce involving a middle-class couple? We want to explore some of the financial issues that are common in gray divorces and to consider them in relation to high net worth couples in Texas.

If you are planning for a divorce after a long-term marriage, you should know that a Texas high asset divorce attorney at Powers and Kerr, PLLC can help.

Common Financial Issues in a Gray Divorce

If you have read anything about gray divorce recently, you probably know that much of the research suggests that older couples who get divorced will experience some financial difficulties. To be sure, gray divorce can be particularly hazardous to your emotional and financial health, far worse than doing so at younger ages. For many people, divorce after age 50 is a major financial shock.

Indeed, if you get divorced after age 50, you should expect your wealth to drop by about 50 percent, based on Brown’s research. In addition, many older women experience what has been described as a “collapse” of their incomes following a gray divorce. When women divorce after age 50, their standard of living often plunges by 45 percent. Given that community property (or most property acquired after the date of marriage) is divided between spouses in Texas, most couples leave a divorce with approximately half of the marital estate, or a distribution based on what a Texas court deems fair and just.

While these statistics concerning gray divorce and the financial aftermath of dissolving a marriage certainly may be accurate and may reflect the financial circumstances for most older adults who do get divorced, do they have the same implications for high net worth couples?

Do Typical Financial Concerns Apply in a Gray High Asset Divorce?

When an older couple goes through a high net worth divorce, does the division of community property have the same financial implications as it does for a couple with relatively limited retirement funds and other assets? In short, although each spouse will end up with only a portion of the community property they acquired during the marriage after a high asset divorce, getting divorced after retirement does not necessarily have the same consequences.

While a high net worth couple may need to live with more regard for finances after a divorce, having assets worth $1 million or more can change the calculus. Such parties likely will not need to return to work (as many individuals do after a gray divorce), and they are more likely to have the assets they need to live a comfortable life after the divorce is finalized. The very wealthy can often emerge from a divorce with their finances relatively unscathed, regardless of age.

Contact an Austin High Net Worth Divorce Attorney

If you need assistance with your divorce, an aggressive Austin high asset divorce attorney can assist you. An experienced complex child custody attorney or complex litigation attorney can also assist you with other matters in your divorce case. Contact Powers and Kerr, PLLC online or by phone at 512-610-6199.

Source:

https://www.bloomberg.com/news/articles/2019-07-19/divorce-destroys-finances-of-americans-over-50-studies-show