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Reed: ‘Gray divorce revolution’ alters traditional estate planning

July 16, 2014
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By James A. Reed

Americans over the age of 50 are getting divorced at a record rate – doubling since 1990. Sociologists have coined the term “gray divorces” to describe this phenomenon. Some estimate that by the year 2030 there will be 800,000 gray divorces annually. These statistics are so significant that social commentators are calling this a “gray divorce revolution.”

In a gray divorce, each spouse often leaves the marriage with a grouping of assets unlike members of any other age group getting divorced. The family situation has changed dramatically – children are now adults and through college, many married and with children. The “gray divorcees” are in the midst of a completely changed or changing lifestyle. At this age there is less time to make any kind of financial rebound because the remaining time for significant earnings is short. The financial planning previously done for the joint husband and wife retirement is out the window or under serious renovation. Estate planning for “us” is now estate planning for “me.”

Estate planning for “gray divorcees” presents unique challenges for their legal and financial planning professionals. Hopefully, your client has involved a skilled financial advisor during the divorce. That advisor can provide invaluable counsel when figuring out what assets are better to take in the property settlement. They also can work with the client to develop a realistic budget for upcoming living expenses. I have found that in these divorces, regardless of the amount of assets, it often still makes good sense (financially and emotionally) to continue employment or obtain employment for the next several years. The longer a client can delay relying heavily on their assets to pay their bills, the better.

Divorce, especially gray divorce, forces a client to answer big questions like, “What in my life is most important to me?” or “What values do I hold most dearly?” or “What do I want my life to be and be about?” Many couples at this age have already been active in philanthropic efforts. The couple may have already established a family foundation or charitable fund. Does the client still value these specific efforts or move in a different direction individually? The estate planning objectives need to align with the answers to those questions and many others. Exploration and assessment are big parts of the client’s overall planning experience.

I advise clients to consider interim estate planning to cover the time before the divorce is final. At the time of the divorce, the estate planning with the gray divorcee basically starts from scratch. If not done already, the client needs an immediate inventory and review of all existing planning documents, especially any powers of attorney granting the former spouse legal authority or health care decision-making. Should the client’s child or children be placed in the roles of personal representative, contingent trustee of the client’s revocable trust, health care decision-maker, and attorney-in-fact possessing full legal authority? Is that child prepared and capable of acting in these critical roles? Does that child fully understand the parent’s wishes and honor the parent’s plans? The considerations involved in this decision-making process often provide a completely new parent/child relationship dynamic.

When married, spouses typically planned on each being available to care for or manage the care of the other if needed. After a divorce, planning for one’s own care is critical. What is the plan for temporary care in case of an accident or sudden illness? Do the legal documents and established plan allow for someone to manage the client’s affairs while incapacitated? Is long-term care insurance a viable option and a wise purchase?

Life insurance is something that is often overlooked in post-divorce planning. If your client has little or no life insurance coming out of the divorce, you should consider how and if life insurance needs to be a part of the plan. I often see so-called “second to die” life insurance policies in gray divorces. Typically, the “second to die” policy does not pay when the first spouse dies, and only pays upon the death of the second. Once divorced, the former spouses may no longer have a common interest in where the proceeds should go. Or, there may be a trustee of an irrevocable trust holding title to the policy with the proceeds funding the trust. Whatever the circumstances, a careful review of life insurance is part of the planning process.

It is not unusual for gray divorcees to find themselves involved in a subsequent committed relationship. A premarital agreement will allow your client to protect assets and define financial responsibilities in the event of a divorce. Also, a premarital agreement will allow your client to control the ultimate disposition of his or her assets at death. For those looking at a non-marital living together relationship, a cohabitation or “no nup” agreement may be advisable. Both agreements can avoid unintended consequences which may be imposed by law without a clear contract.

Estate planning with the gray divorcee client requires a thoughtful and deliberate approach to the unique circumstances these clients present. It is a time of significant life transition and exploration. Even once a plan is in place, these clients require more frequent review and possible plan adjustments than do your more traditional planning clients.•

__________

James A. Reed–jreed@bgdlegal.com–is a partner at Bingham Greenebaum Doll LLP. Reed focuses his practice on the legal aspects of relationship transitions of all types. Reed is a fellow of the American Academy of Matrimonial Lawyers. The opinions expressed are those of the author.

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  1. A high ranking Indiana supreme Court operative caught red handed leading a group using the uber offensive N word! She must denounce or be denounced! (Or not since she is an insider ... rules do not apply to them). Evidence here: http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  2. A high ranking bureaucrat with Ind sup court is heading up an organization celebrating the formal N word!!! She must resign and denounce! http://m.indianacompanies.us/friends-educational-fund-for-negroes.364110.company.v2#top_info

  3. ND2019, don't try to confuse the Left with facts. Their ideologies trump facts, trump due process, trump court rules, even trump federal statutes. I hold the proof if interested. Facts matter only to those who are not on an agenda-first mission.

  4. OK so I'll make this as short as I can. I got a call that my daughter was smoking in the bathroom only her and one other girl was questioned mind you four others left before them anyways they proceeded to interrogate my daughter about smoking and all this time I nor my parents got a phone call,they proceeded to go through her belongings and also pretty much striped searched my daughter including from what my mother said they looked at her Brest without my consent. I am furious also a couple months ago my son hurt his foot and I was never called and it got worse during the day but the way some of the teachers have been treating my kids they are not comfortable going to them because they feel like they are mean or don't care. This is unacceptable in my mind i should be able to send my kids to school without worry but now I worry how the adults there are treating them. I have a lot more but I wanted to know do I have any attempt at a lawsuit because like I said there is more that's just some of what my kids are going through. Please respond. Sincerely concerned single parent

  5. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

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