Gray Divorce and Spousal Maintenance

Are you involved in a “Gray Divorce” near or during retirement? An experienced Colorado Springs divorce and family lawyer can guide you through the legal process and assist in exploring your options. You have one bite at the apple in the court system so make it count.

There are some unique aspects of divorces that occur later in life – “gray divorce”. One important aspect is that people at or near the end of their working lives have less opportunity to recoup financially after divorce. The resources that they have accumulated may be all that they will have, therefore a fair division is even more important.

Spousal maintenance may differ for couples at or near retirement. “When a party has requested maintenance in a dissolution of marriage/legal separation proceeding, prior to granting or denying the award of maintenance, the court shall make initial written or oral findings concerning: the amount of each party’s gross income; the marital property apportioned to each party; the financial resources of each party including, but not limited, to the actual and potential income from separate or marital property; and reasonable financial need as established during the marriage.” C.R.S. § 14-10-114(3)(a)(I).

Only after making these initial findings, can the court determine the amount and term of maintenance, if any, that is fair and equitable to both parties after considering the guideline amount and term of by considering additional factors set forth in C.R.S. § 14-10-114(3)(c). If a court determines that maintenance is not appropriate, then the additional factors are not evaluated.

With regards to the statutory follow-on factors, (not listed here) age and health are particularly relevant aspects for gray divorce. Increasing age and declining physical, emotional, and mental health often reduce the ability to earn income. Increasing costs of health insurance and care are relevant as couples age. The availability and cost of insurance after the divorce should also be considered. Sometimes a party will raise speculative concerns about a lack of ability to work, however Colorado law requires consideration of current circumstances. See In re Sharp’s Marriage, 539 P.2d 1036 (Colo. App. 1975). Even if age or health issues do not interfere with a person’s ability to work, they can impact the opportunity to work due to a possible preference for younger workers by employers. Keep in mind that there is a rebuttable presumption that once a party has reached customary Social Security retirement age that retirement is reasonable. C.R.S. § 14-10-122(j)(b) states that:

“a payor spouse who income is reduced or terminated due to his or her retirement after reaching full retirement age is entitled to a rebuttable presumption that the retirement is in good faith. C.R.S. § 14-10-122(j)(c) goes on to state that, “full retirement age” means the payor’s usual or ordinary retirement age when he or she would be eligible for full United States Social Security benefits, regardless of whether he or she is ineligible for Social Security benefits for some reason other than attaining full retirement age. Full retirement age shall not mean early retirement age if early retirement is available to the payor spouse, nor shall it mean maximum benefit retirement age if additional benefits are available as a result of delayed retirement.” C.R.S. § 14-10-122(j)(b).

Tip: If a party claims an inability to work or a limitation on the ability to work, a vocational assessment should be considered. Alternatively, a medical functional capacity assessment may be useful outside of a vocational assessment. Also, a Social Security disability rating is relevant if there is one. However, courts may be skeptical if unsupported claims of limitations on work by a party.

It is also important to consider age and health factors in determining strategy as to whether an unequal distribution of property or spousal maintenance is more desirable. As couples age, there are unknowns about the progression of health and related impact on earning capacity. While it is clear when a person will reach Social Security retirement age, it is not possible to accurately predict the progress of a potential decline in health.

For example, once property is divided, it can not be reallocated absent rare circumstances such as the failure to disclose a material asset. Whereas spousal maintenance is always subject to modification based on a substantial and continuing change of circumstances making the original award unfair. As well, the court can order a nominal award of maintenance and reserve jurisdiction if there is an important future contingency, such as retirement, that should be considered. See In re Marriage of Folwell, 910 P.2d 501, (Colo. App).

Tip: It may be important to assist clients in understanding that a post-divorce lifestyle may involve a lower standard of living once resources are divided. This may be important for a dependent spouse who may view maintenance needs in light of what budget would be needed to maintain the current lifestyle.

It is important to secure maintenance with life insurance if possible, particularly if there are no survivor benefits. C.R.S. § 14-10-114(6) authorizes the court to secure maintenance. When entering an order the court must consider: the age and insurability of the payor spouse; the cost of the life insurance; amount and term of the maintenance; whether the parties carried life insurance during the marriage; prevailing interest rates at the time of the order; and other obligations of the payor spouse. The reality is that the older the prospective insured person is, the more expensive life insurance is to purchase and maintain. Many reasonably priced term policies are not even offered beyond age 65. Additionally, coverage may be denied for preexisting health conditions.

A knowledgeable and experienced Colorado Springs divorce and family lawyer can guide you through Colorado Springs divorce family law matters by negotiating, mediating and litigating on your behalf. You can focus on moving on to a better future instead of spending your time attempting to navigate complex legal rules and procedures.

Sabra Janko from Janko Family Law has 20 years of legal experience and has written “the book” on Colorado divorce and family law – “Colorado Family Law With Forms”, published by LexisNexis, which you can find at https://store.lexisnexis.com/products/colorado-family-law-with-forms-skuSKU02903. Contact us at 719-344-5523 or complete our online scheduling request for a free 30-minute informational consultation.