When getting divorced over 50, experts say avoid these mistakes

Meryl Streep and Don Gummer, Bill and Melinda Gates, Nicole Kidman and Keith Urban, Hugh Jackman and Deborra-Lee Furness. What do these famous couples have in common? They all divorced after lengthy marriages, and all were in their 50s (or older) when they split. The phenomenon of “gray divorce” refers to a rising trend of divorces among couples aged 50 and older, even after decades of marriage. Several interconnected factors explain why older couples, after spending nearly half their lives together, are choosing to end their relationships.

Inspiration: Stories of those 50+ doing extraordinary things

Gift Guides you can actually afford: Holiday Gift Guides from Nifty 50+

Factors leading to the rise in gray divorce

Increased life expectancy and retirement

People are living longer, healthier lives. A couple in their 50s or 60s may realize they have two or more decades left and decide they don’t want to spend that time in an unhappy or unfulfilling marriage. Retirement changes dynamics — and couples often spend much more time together than earlier when they were working and raising children. A spouse’s transition to retirement often disrupts the established routines and roles that once held the marriage together.

The empty nest syndrome

Many couples discover how much of their marriage was centered on raising a family. Once the kids grow up and move out, partners may find they have less in common outside their parenting roles (or have simply grown apart). When the focus shifts from kid-rearing to the relationship itself, the underlying issues or incompatibilities that were “back-burnered” for years become difficult to ignore.

Pursuit of personal fulfillment

There’s been a growing emphasis on personal happiness and self-fulfillment at all life stages. Older individuals recognize that they deserve a second chance at finding a happy relationship or a satisfying life living solo. A sort of reckoning occurs in our early 50s, which can trigger serious self-reflection. We often reassess our life choices, including our marriages.

Financial independence and social acceptance

Unlike previous generations, today’s older women have more financial independence. Divorce becomes a viable and less financially daunting alternative to remaining in an unsatisfying relationship. Divorce in general also carries far less social stigma than it did in the past. This increased acceptance makes the decision easier for older people who may have stayed in unhappy marriages for fear of judgment.

Financial implications of gray divorce on retirement

A gray divorce has unique financial implications regarding retirement assets, as couples have less time to recover financially than younger people.

“Failure to understand your financial circumstances is, without question, the biggest mistake anyone can make.”

— Sean Smith, family law services attorney

Sean Smith, family law services attorney at Brach | Eichler, LLC in New Jersey, said, “If you live in a community property state where the presumption is that all assets acquired during the marriage are 50-50, the division of investment accounts, where it’s after-tax dollars, isn’t too complicated. You divide it one way and transfer it into a new bank account or investment.”

Smith explained that the rules for dividing assets differ based on whether the asset is a traditional investment account (after-tax) or a tax-deferred retirement account.

Dividing non-retirement assets (after-tax dollars), which can include bank accounts, brokerage/investment accounts, and real estate.

Feature	Description
Tax status	Non-taxable transfer. Transfers incident to a divorce judgment are non-taxable to either party.
Method of division	Typically simple: an in-kind distribution (e.g., dividing shares of stock) or a cash transfer into a new account
Legal document	Division is governed by the state’s marital property laws (Community Property or Equitable Distribution) and formalized in the divorce decree or settlement agreement. No specialized federal order is needed.

Dividing retirement accounts (pre-tax/tax-deferred)

These accounts (401(k)s, 403(b)s, pensions) are titled in one spouse’s name but considered marital property if contributed to during the marriage, said Smith. The primary challenge is transferring the funds without triggering an early withdrawal penalty or an immediate tax liability. The domestic relations order (DRO) allows you to transfer retirement funds in a non-taxable manner, said Smith. “Without a DRO, the transfer is treated as income, resulting in immediate taxation for the recipient,” he said.

The qualified domestic relations order (QDRO) is the most common type of DRO. It’s a specialized court order that applies to federally regulated employer plans (like 401(k)s and traditional pensions). The QDRO tells the plan administrator to move a specific amount from the participant spouse to the alternate payee spouse, said Smith.

How division is determined

Spouses may agree to offset accounts (one keeps a retirement account, the other keeps a greater share of the home equity) or they may equalize the total value of all retirement accounts acquired during the marriage, said Smith.

He said, “Only the value of the funds acquired during a marriage is subject to division. Money contributed before the marriage is usually considered separate property.” Once the division is determined, the attorney drafts the DRO, which a judge signs, and then it’s submitted to the plan administrator to execute the tax-free transfer (often as a direct rollover into the former spouse’s own retirement account).

What about the house?

“Deciding whether to keep the marital home or sell it and split the proceeds is rarely simple,” said Smith. “While emotions can heavily influence both parties’ choices, the primary factor should be a financial one. In most cases, people opt to sell the home.”

When it’s better to sell

The prevailing advice? Approach your home as a financial asset, not an emotional symbol. Divorcing parties, especially those nearing or in retirement, need liquid assets (cash) to fund two separate lives and retirements. Keeping a home often requires one partner to buy out the other, said Smith, which can deplete all available cash and liquid investments.

Even when a house is fully paid off, it has property taxes, insurance, and maintenance costs. These expenses, plus a lower pool of retirement savings, can turn the property into a financial burden rather than a security. Smith said, “Financial advisors often remind clients that a primary residence isn’t a great long-term investment in terms of compounding returns compared to diversified investment accounts.”

He estimates that about 90% of his divorce cases result in selling the marital property, regardless of the overall size of the marital estate.

When it’s better to keep

Keeping the home is feasible if it’s financially sustainable for the spouse who lives in it. If the house is paid off, has a low tax burden, and maintenance (and other expenses) are less than renting a comparable property, it’s worth exploring whether one party can retain it, said Smith. The caveats? Whoever keeps the house needs enough cash or liquid assets to pay the other spouse their equitable share without jeopardizing their own retirement security or daily requirements. If the house still has a mortgage, the spouse must qualify to refinance it in their own name to remove their former partner’s liability.

The court’s role (and emotional detachment)

If both partners can’t agree on the house, the court has limited tools, said Smith. A judge can award the home to one person, but only if they have demonstrated they can buy out the other. If the resources to execute a clean buyout aren’t available, the court will order the house sold, with the proceeds divided evenly between both people.

“Homes can be anchors,” said Smith. “They can be albatrosses that hold you down for the rest of your life. They don’t generate income — they generate cost. When you sell them, they generate revenue, but up to that point, they really just provide shelter. From a lawyer’s perspective, we tend to be analytical and cold when considering property.”

Smith said he often recommends therapy to help his clients navigate their divorce. “The house, post-divorce, is just a piece of property; clinging to it emotionally can cause economic harm,” he said. A therapist can help them recognize that the emotional ties (memories) are connected to a family unit that no longer exists.

Avoid this #1 mistake

If you’ve reached a point where divorce has moved from possibility to reality, Smith said, “The biggest mistake people make is making decisions before they have a full understanding of the family’s financial circumstances. People who’ve been married for a long time are often embarrassed to admit that they have no idea of the financial picture, so they make decisions based on incomplete information. When that happens, they end up waiving rights or giving away assets that are available through a divorce process.”

The first step, once you’ve met with an attorney, is to exchange full financial disclosures. Attorneys use a process called discovery, Smith said, to obtain financial information by communicating with banks, financial institutions, or firms. “Failure to understand your financial circumstances is, without question, the biggest mistake anyone can make.”

Other non-financial mistakes to avoid

While financial planning is paramount in a gray divorce, other common mistakes often stem from emotional decisions and a failure to address the social and legal impacts of ending a decades-long relationship.

Making decisions based on emotion, not logic

An attorney views all divorces analytically, said Smith. The biggest pitfall? Allowing anger, hurt, guilt, or desire for revenge to dictate a settlement. Fighting over every minor asset or pursuing costly litigation to “punish” the ex-spouse leads to higher legal fees, emotional exhaustion, and a slower resolution. Settling too quickly out of guilt can result in a one-sided settlement or a spouse giving up valuable assets (like a portion of retirement accounts) to avoid confrontation. The problem? Potential financial vulnerability in the future.

Neglecting the impact on adult children

It’s common to assume that because children are adults, the divorce won’t affect them. But adult children often feel a sense of loss, disruption, or pressure to choose a side. These perfectly normal reactions can create lasting damage to family relationships. Treating adult children as confidants or messengers about divorce proceedings places an unfair emotional burden on them. If one or both parents were providing financial support (college tuition, help with a down payment on a home), failing to plan for the divorce’s impact on this support can also cause a major strain.

Failing to update critical estate and legal documents

After decades of marriage, a person’s entire life structure is often tied to their spouse. Revise wills, trusts, and powers of attorney, so an ex-spouse doesn’t have to make critical medical decisions or unintentionally inherit property if the worst occurs before the divorce becomes final.

Update beneficiary designations on life insurance policies, IRAs, and 401(k)s. Even if the divorce decree specifies the new beneficiaries, the financial institution must often follow the original beneficiary form on file.

Ignoring future health and health care needs

The most common mistake people make, said Smith, is failing to plan for the immediate loss of coverage if one spouse relies on the other spouse’s employer-sponsored plan. Once a divorce is finalized, a non-employee former spouse loses eligibility, which can create a significant health insurance gap, especially for those under age 65 who don’t qualify for Medicare.

Smith said, “We can structure an agreement that accounts for the expenses associated with healthcare coverage.” He said the best approach is to research the cost of your insurance premiums. “When your attorney asks how much you need from a bottom-line perspective to live, you can’t forget to factor in insurance costs.”

While the decision to end a long marriage is deeply personal, it’s possible to build your second act on a foundation of security, not regret.

When getting divorced over 50, experts say avoid these mistakes