A few weeks ago, I attended the national conference of the Society for Certified Senior Advisors.

The Certified Senior Advisor (CSA)® credential can be earned by professionals by demonstrating their competence and knowledge in working with older adults. I have held this designation since 2008.

I attended the conference as part of my continuing education.

One of the sessions I attended was titled, The Case for Divorce Financial Planning.

It was presented by Carol Lee Roberts who is the President of the Institute for Divorce Financial Analysts (IDFA). IDFA provides specialized training to accounting, financial, and legal professionals in the field of pre-divorce financial planning.

I am guessing that J. Lo’s people know a lot about this topic, but most of it was new to me.

First, I did not know how prevalent divorce is.

Most of us have heard the statistics that 50% of first marriages end in divorce. According to the presenter, this is a misnomer.

The 50% number comes from taking all the first marriages each year and dividing it by first time divorces. It does not track the actual people that married for the first time and then divorced. That number is 34%. Ok, that sounds better.

But that number grows to 60% for second marriages and 73% for third marriages. I guess the saying “The third time’s a charm,” doesn’t hold true when it comes to divorce.

The idea of divorce is also growing by leaps and bounds.

Inquiries about divorce saw a post-COVID boom. As early as April 2020 the interest in divorce had increased by 34%. On legal sites, interest in Do It Yourself (DIY) divorce saw a 34% rise, and this interest was global, with the UK seeing divorce inquiries rising by 122% and China seeing a 40% surge after the country reopened.

Grey divorce, or divorce by older adults, is also growing. The divorce rate for those over 50 has doubled since 1990, and for those over 60 it has tripled.

One may wonder why divorce has become so frequent in the older adult demographic.

It is explained by three main reasons.

First, there is less stigma around divorce today than in the past. For example, a 2022 Gallup poll found that 81% of people polled considered divorce to be morally acceptable.

Next is longevity; aging represents a big change, and people's priorities, interests, and needs may shift as they grow older. Living longer means there is more time to drift apart or develop issues. 

And finally, people over 50 may feel they can divorce because they have greater financial freedom than they did when they were younger, and they still have time to lead a fulfilling life.

It is predominantly women who take the first step in filing for divorce (70% of the time), but it is often followed by negative financial consequences. Almost half of women decrease their standard of living post-divorce. 

Many factors come into play here. Women still earn 89 cents to every dollar earned by a man, and the average woman has one third of the savings of men, reducing her ability to keep up her current standard of living.

Given the prevalence of divorce, and the financial implications, the presenter underscored the importance of financial planning pre- and post-divorce, but especially for women.

She spoke about the consideration that should be given to account for the difference between marital property and separate property (or that which each person brought into the marriage, along with inherited property and gifts).  

She highlighted ways to divide the marital home, along with tax considerations and the potential use of reverse mortgages for grey divorce. And she spoke about how to structure retirement plans and unique issues with insurance including COBRA, long term care, and life and disability insurance.

She noted, “There is so much to consider, but most couples bury their head in the sand. Couples enter estate planning conversations during marriage including discussions about death and taxes, but almost never discuss divorce.”

It is interesting that divorce is a more taboo subject than death when it comes to estate planning.

If you are an older adult advocating for yourself in a divorce, it may make sense to reach out to a Divorce Financial Analyst. You can find one here https://institutedfa.com/.