Gray Divorce in Michigan: Divorcing After 50

Divorce after 50, often called gray divorce, is no longer rare. Sociologists at Bowling Green State University found that the divorce rate for Americans over 50 roughly doubled between 1990 and 2010. In Oakland County I regularly represent spouses ending marriages of 25, 30 and 40 years.

Michigan does not have a special statute for gray divorce. The same rules govern property division, spousal support and procedure. What changes is the math. After a long marriage, most of the wealth is usually in retirement accounts and the house, both spouses are closer to the end of their earning years than the beginning, and mistakes are much harder to recover from. Here is what matters most.

Retirement Assets Are Usually the Center of the Case

For many couples over 50, the 401(k), IRA or pension is worth more than the house. Under MCL 552.18, vested pension, annuity and retirement benefits earned during the marriage are part of the marital estate, and unvested benefits may be included where that is just and equitable. Benefits earned before the marriage are generally treated as separate property, so the first job is often separating the premarital portion from the marital portion.

A few points that come up again and again:

• Pensions need a separate order. A private-sector pension or 401(k) is divided with a Qualified Domestic Relations Order (QDRO). Many Michigan public plans, including state and school employee plans, use an Eligible Domestic Relations Order (EDRO) instead. The judgment of divorce alone does not move the money. The plan administrator must approve the order, and a poorly drafted order can cost a spouse benefits permanently.
• Survivor benefits must be addressed. Under MCL 552.101, every Michigan judgment must determine each spouse's rights in pensions, annuities and retirement benefits. For cases filed after September 1, 2006, an assignment of a pension includes a proportionate share of components such as early retirement subsidies, post-retirement increases and surviving spouse benefits unless the judgment expressly excludes them. Whether the non-employee spouse keeps a survivor benefit can be worth hundreds of thousands of dollars.
• A dollar in a 401(k) is not a dollar in the bank. Pre-tax retirement money will be taxed when it is withdrawn, while money in a savings account or home equity usually will not. Trading the house for the retirement account, or the reverse, should be done on an after-tax basis.
• A pension is not the same as its statement balance. A defined benefit pension pays a monthly amount for life. Its present value depends on age, interest rates and the plan's terms, and it often requires an actuary to value.

Michigan divides marital property equitably, which usually means close to equally but not always. For more on how judges approach the division, see How Marital Property Is Divided in a Michigan Divorce.

Spousal Support After a Long Marriage

Michigan has no formula for spousal support. Under MCL 552.23, judges weigh factors including the length of the marriage, each spouse's age, health and ability to work, the property each receives, and the standard of living during the marriage. Length of marriage is often the most influential factor, which is why spousal support is far more common in gray divorces.

Questions specific to later-life divorce include:

• Can the lower-earning spouse realistically return to work? A 58-year-old who has been out of the workforce for 25 years is in a very different position than a 35-year-old.
• What happens at retirement? When the paying spouse retires, income often drops sharply. Whether that justifies reducing or ending support is a common post-judgment fight, and it is far better to address it in the judgment.
• Is support modifiable? Spousal support in Michigan is generally modifiable when circumstances change unless the parties agree to make it non-modifiable. That single term can matter more than the monthly amount.
• Double dipping. If a pension is divided as property and then the same pension income is also counted to set support, one spouse can end up paying twice from the same asset. This needs to be addressed directly.

Our spousal support estimator can give a rough starting range, but in a long marriage the factors above usually decide the case. For more, see Spousal Support in Michigan.

Social Security and Health Insurance

Social Security is a federal benefit and is not divided in a Michigan divorce. But it matters. Under Social Security Administration rules, a divorced spouse whose marriage lasted at least 10 years, who is at least 62 and who has not remarried may be able to collect benefits based on the former spouse's work record, up to half of the former spouse's full retirement benefit. Collecting on an ex-spouse's record does not reduce that person's own benefit. If your marriage is approaching the 10-year mark, the timing of the divorce can matter.

Health insurance is often the most urgent practical issue. A spouse who is covered under the other spouse's employer plan loses that coverage when the divorce is final. Federal COBRA law generally allows a divorced spouse to continue the employer coverage for up to 36 months, at full cost. For a spouse who is a few years short of Medicare eligibility at 65, the cost of bridging that gap should be part of the settlement and the support analysis.

The House

After a long marriage, the family home often carries emotional weight and significant equity. Keeping it is not always the best financial decision. A spouse who takes the house in exchange for a larger share of retirement assets may end up house-rich and cash-poor, with property taxes, maintenance and no paycheck to cover them. Before agreeing to keep the house, it is worth running the numbers on what the next 20 years actually look like.

Adult Children and Family Dynamics

Most gray divorces involve adult children, so custody and child support usually are not issues. But adult children are often pulled in emotionally, and some spouses still support adult or disabled children financially. Support for a dependent adult child, college costs and family gifts or loans to children can all become disputed issues in property division.

Estate Planning: Update Everything

Divorce changes some estate planning documents automatically, but not all of them. Under MCL 700.2807, a Michigan divorce revokes many revocable gifts to a former spouse in wills and revocable trusts, revokes nominations of the former spouse as personal representative, trustee or agent, and converts jointly held property with survivorship rights into a tenancy in common.

That statute has limits. Employer retirement plans governed by federal law pay whoever is named on the plan's beneficiary form, regardless of state law. Life insurance must be dealt with in the judgment under MCL 552.101. Many judgments also require one spouse to keep life insurance to secure spousal support. As soon as the judgment enters, review and update:

• Wills and trusts
• Beneficiary designations on every 401(k), IRA, pension, life insurance policy and annuity
• Financial and medical powers of attorney and patient advocate designations
• Account titles and transfer-on-death designations

Practical Steps If You Are Considering Divorce After 50

1. Gather retirement statements. Collect current statements and, if possible, statements from around the date of the marriage for every retirement account and pension.
2. Get the pension plan documents. The plan's summary and rules determine what options exist for division and survivor benefits.
3. Know your monthly budget. Spousal support and the property split both turn on what each spouse actually needs.
4. Look at health insurance early. Know what coverage will cost after the divorce and how long until Medicare.
5. Do not move money or change beneficiaries on your own. Draining accounts, cancelling insurance or changing beneficiaries while a divorce is pending can lead to court orders, sanctions and damaged credibility that follows you through the case.
6. Talk to a lawyer before agreeing to anything. Long marriages often end in negotiated settlements, which is usually a good thing, but the terms around pensions, survivor benefits and support modification are hard to undo later.

How We Help

Gray divorces are rarely about winning a courtroom fight. They are about getting the retirement math right, protecting income for the decades ahead, and finishing the process with dignity. Many of our clients resolve their cases through negotiation or mediation, and some qualify for an uncontested divorce. When there is significant wealth, business interests or complex compensation, our high-asset divorce practice brings in the right financial experts.

If you are considering divorce after a long marriage, a free, confidential consultation can help you understand what is at stake and what your options are.