7 Key Considerations of a New Jersey Gray Divorce

Divorce is never an easy process. However, when a marriage dissolution happens later in life – oftentimes referred to as a New Jersey gray divorce – the challenges can be particularly complex and even overwhelming. In the Garden State where family law has its own nuances, couples over 50 who decide to end their marriage face unique legal, financial, and emotional hurdles.  

Gray divorce (as alluded to a moment ago, typically involving spouses aged 50 and older) has been on the rise nationwide. New Jersey is no exception. According to recent studies, divorce rates among older adults have doubled since the 1990s. However, New Jersey’s specific laws, high cost of living, and complex asset division make gray divorces here particularly intricate.  

We take a moment to discuss with you seven key considerations or aspects of a New Jersey gray divorce that older couples should understand before proceeding.

New Jersey Gray Divorce Property Division

New Jersey follows the principle of what is known as equitable distribution or equitable division of property. What this means is that marital assets and debts are divided fairly. Fairly does not necessarily mean equally, however. Unlike community property states (where assets are split 50/50), New Jersey courts consider factors that include:  

• Length of the marriage  
• Each spouse’s income and earning potential  
• Contributions to the marriage (financial and non-financial)  
• The standard of living established during the marriage  

For older couples, this means retirement accounts, pensions, and real estate may not be split down the middle. Instead, the court will assess what is fair according to the facts and circumstances of a particular case. This type of property division could leave one spouse with a significantly different financial future than what historically has been the case.  

Alimony Considerations for Older Spouses  

Alimony or spousal support is a major factor in gray divorces because one spouse (often the wife) may have sacrificed career opportunities to raise children or support the household. New Jersey courts consider:  

• Duration of the marriage (longer marriages often result in longer or permanent alimony)  
• Age and health of both spouses  
• Ability of the lower-earning spouse to become self-sufficient  

Because older individuals may struggle to re-enter the workforce after divorce, New Jersey courts may award open durational alimony (essentially permanent alimony) for long-term marriages. You do need to keep in mind that legal reforms have made it harder to obtain indefinite alimony. This reality underscores the need for capable legal representation who can negotiate a fair settlement that takes into consideration alimony matters.  

Complex Retirement Account Division  

Retirement assets (pensions, 401(k)s, IRAs) are oftentimes the most valuable assets in a gray divorce. New Jersey law in some instances requires these types of assets to be divided through what is known as a Qualified Domestic Relations Order or QDRO. Key considerations in these types of situations are:

• Pensions: If one spouse has a pension, the other may be entitled to a portion, if the marriage overlaps with the earning years.  
• Social Security: While not divisible in divorce, a spouse married for at least 10 years can claim benefits based on the other’s work record.  
• Tax implications: Withdrawals from retirement accounts post-divorce can trigger taxes, so financial planning is essential.  

Impact of New Jersey’s High Cost of Living 

A stark reality is that New Jersey is one of the most expensive states in the United States to live. This has the potential to complicate gray divorces. For example, housing, healthcare, and taxes can strain post-divorce finances. There are a number of divorce-related considerations to bear in mind:

• Home equity: Many older couples own homes with significant equity, but selling may be necessary to divide assets.  
• Property taxes: High taxes mean keeping the family home may not be feasible for one spouse alone.  
• Healthcare costs: Losing a spouse’s employer-sponsored health insurance can be devastating, especially before Medicare eligibility at 65

Inheritance and Estate Planning Issues and Complications 

A New Jersey gray divorce also has the potential to disrupt long-established estate plans. Key issues that come into play in this regard are:

• Wills and trusts: Divorce automatically revokes spousal inheritance rights in New Jersey unless specified otherwise.  
• Beneficiary designations: Retirement accounts and life insurance policies must be updated post-divorce.  
• Adult children’s inheritance: Divorce can complicate inheritances, especially if one spouse remarries

Younger divorcing couples have decades to rebuild their lives, including their finances. A person who goes through a gray divorce faces unique challenges that include:

• Reduced earning potential  
• Shorter time to grow investments  
• Higher healthcare expenses  

Emotional and Social Challenges 

Finally, beyond financial consideration, a New Jersey gray divorce can result in emotional struggles as well:  

• Loneliness: After decades of marriage, rebuilding a social life can be difficult.  
• Family dynamics: Adult children may struggle to accept the divorce, leading to strained relationships.  
• Dating later in life: Older individuals may find modern dating overwhelming.  

If you have questions concerning a gray divorce in New Jersey call the Law Offices of Peter Van Aulen today at (201) 845-7400 for a free consultation.