Gray divorce refers to ending a marriage later in life, usually when spouses are 50 or older. It can also mean the breakup of a long marriage after children are grown. While these divorces may seem simpler without child custody issues, the financial side is often more complicated. Couples may have spent years saving for retirement, buying property, running a business, and planning their future together. We guide clients in Chicago through how a gray divorce in Illinois can impact their property, income, health insurance, estate plans, and long-term financial security.
Long marriages rarely end for just one reason. Some couples drift apart after years spent focusing on work, raising children, and handling family responsibilities. When the children move out or retirement nears, spouses may find they want different things for their future.
Living longer can also influence the choice to divorce. Someone in their 50s or 60s might not want to spend many more years in an unhappy marriage. Having more financial independence can also make divorce an option for a spouse who once relied on their partner’s income.
Retirement can bring new challenges to a marriage. Couples who were used to spending time apart may now be together much more. Issues like money, travel, family, caregiving, and where to live can become more noticeable and harder to avoid.
No matter the reason for divorce, we encourage clients to think carefully about both the emotional and financial effects before making any decisions.
Property division is often the central issue in a gray divorce. Under 750 ILCS 5/503, Illinois generally treats property and debts acquired by either spouse during the marriage as marital property, subject to statutory exceptions. The court divides the marital estate in just proportions after considering factors such as each spouse’s contribution, the length of the marriage, economic circumstances, age, health, income, employability, and future opportunities. Illinois law does not require an automatic 50-50 division.
A long marriage often includes assets like a home, vacation property, investment accounts, pensions, retirement plans, life insurance, deferred compensation, valuable personal items, and business interests. Some of these may be partly marital and partly non-marital property.
For example, a spouse may have owned an investment account before the marriage but continued contributing marital income to it. Careful tracing may be needed to determine which portion remains non-marital. Missing statements or commingled funds can make that analysis more difficult.
We help clients identify all marital assets before talking about a settlement. Dividing property without considering taxes, liquidity, and future income can lead to unfair results, even if the numbers look equal at first.
Retirement savings often represent one of the largest assets in a gray divorce. A pension, 401(k), 403(b), IRA, deferred compensation plan, or other retirement benefit may be marital property to the extent it was earned during the marriage.
An account statement might not show the true value of a retirement plan. For example, a pension could pay monthly income instead of showing a current balance. Some plans also include survivor benefits, early retirement choices, or cost-of-living increases that can change the value.
Spouses should not assume they can transfer retirement assets by simply withdrawing them. Some employer-sponsored plans need a qualified domestic relations order or a specific court order. If done incorrectly, the transfer could lead to taxes, penalties, or lost benefits.
We help clients decide whether to divide retirement assets, offset them with other property, or include them in a larger settlement. The best choice depends on the type of plan and what each spouse will need in the future.
Maintenance, or spousal support, is often a key issue after a long marriage. One spouse may have earned much less, stayed home to raise children, or helped the other’s career. Going back to full-time work can be hard due to age, health, outdated skills, or a long break from working.
Under 750 ILCS 5/504, an Illinois court may award maintenance after considering factors that include the parties’ income, property, needs, earning capacity, age, health, standard of living during the marriage, duration of the marriage, and contributions to the other spouse’s education or career. Marital misconduct is not a factor in deciding maintenance.
The standard maintenance formula does not apply to every case. Divorces with higher incomes or special situations may need a more tailored approach. We look at cash flow, retirement plans, job prospects, taxes, and what assets each spouse will get.
Many older couples have lived in their home for many years. While the house can have strong emotional value, keeping it is not always affordable.
A spouse who wants to keep the home needs to think about mortgage payments, property taxes, insurance, upkeep, repairs, and whether the house will be easy to live in later. Buying out the other spouse might mean refinancing or using retirement savings and investments that could otherwise provide income.
Selling the home may create liquidity and allow both spouses to purchase more suitable housing. However, market conditions, capital improvements, tax concerns, and the timing of the sale should be reviewed.
We advise clients to see the home as both a place to live and a financial asset. While memories matter, it’s important to honestly consider if keeping the house is affordable.
Health insurance can become a pressing concern when one spouse receives coverage through the other spouse’s employer. Divorce usually ends eligibility for coverage as a spouse, although temporary continuation coverage or another insurance option may be available.
A person who is not yet eligible for Medicare may eed to purchase private coverage or obtain insurance through employment. Premiums, deductibles, prescriptions, and anticipated treatment should be included in post-divorce planning.
Health issues may also affect maintenance, employability, housing needs, and the division of liquid assets. We consider these expenses before evaluating whether a proposed settlement will provide enough financial stability.
Gray divorce frequently changes a client’s estate-planning goals. A will, trust, power of attorney, life insurance policy, retirement account, or payable-on-death designation may still name the former spouse.
The divorce judgment does not necessarily update every document or account automatically. Beneficiary designations and estate-planning documents should be reviewed after the divorce, subject to any obligations created by the judgment or settlement agreement.
Clients should also consider who will make medical or financial decisions if they become incapacitated. Adult children, relatives, or another trusted person may need to replace the former spouse in those roles.
Before filing for divorce, gather tax returns, bank statements, retirement records, property documents, insurance information, credit reports, and estate-planning documents. Do not hide, transfer, or destroy marital property.
A complete financial review can help you understand what retirement may look like in two households instead of one. It can also identify concerns involving debt, beneficiary rights, business income, or property that may be difficult to value.
We help clients set practical priorities and evaluate both immediate and long-term consequences. A gray divorce should be resolved with careful attention to the years ahead, not merely the next court date.
Gray divorce can create serious questions about retirement, maintenance, real estate, health insurance, estate planning, and long-term financial security. We help clients identify marital and non-marital property, evaluate retirement benefits, prepare maintenance claims, and consider how each settlement option may affect life after divorce.
Gordon & Perlut, LLC represents clients in Chicago, Skokie, and throughout Illinois. Our attorneys provide clear legal guidance to individuals facing divorce later in life and other complex family law matters.
Call our Chicago gray divorce lawyers at our Chicago office at 312-360-0250 or our Skokie office at 847-329-0101 to schedule a free consultation. We represent clients throughout Chicago, Skokie, and Illinois.
