Broker Check

Practical Planning Tip: Women and Wealth - Gray Divorce

March 20, 2024

Today we’re going to continue our discussion of women & wealth. Since it is Women’s history month, The videos through the end of March will be on this topic. Specifically, I will discuss Women & Gray Divorce.

The term “gray divorce” was coined to describe individuals 50 and older who are getting divorced. At any age, divorce can have devastating financial consequences. However, it can be especially difficult when it happens later in life.

Special considerations exist for women getting gray divorces. Many women in this age group have been out of the workforce for a long time or earn less than their spouses. As a result, they may be dependent on their ex-spouse for financial support or maintaining and paying for health insurance coverage after a divorce. Additionally, if married for over 10 years, they may qualify to collect Social Security based on their former spouse’s employment record. The divorce settlement may constitute the primary or sole source of funds for retirement, so it’s crucial for these funds to be properly managed.

It’s important for practitioners to collaborate with their female clients on all aspects of planning EARLY in their careers. And, as I mentioned in a previous video, Encouraging women to take control of these decisions, can lead to a much smoother transition should a marriage disintegrate.

Planning Tip for Financial Advisors: Which is that It’s worth noting that it is COMMON for the female spouse to LEAVE their current financial advisor after a divorce. This may be due to the fact that their husband had the main relationship with the family financial advisor or their advisor was not understanding or appreciating their concerns. Personally, I have a number of female clients who moved their assets to me AFTER a divorce.

As a practical planning tip FOR advisors is, You should let this new client do most of the talking when you first meet. It’s important to be mindful that divorce is a very traumatic experience. Advisors should start by letting the client SHARE information about their situation, which will lead to discussing their concerns, goals, and ultimately their dreams. Establishing this trust by serving as a sounding board instead of going straight into sales mode is SO important in helping the client move on financially after a divorce.

You can WATCH the full video here.