Image of a couple going through a grey divorce. Learn about the collaborative divorce process.


“The Rise of Grey Divorce and the Benefits of the Collaborative Divorce Process” by Robert M. Nemeth, CPA/ABV, CVA, CDFA, Bob Nemeth head shotCFE | Principal – Business Valuation/Tax 

The overall U.S. divorce rate may have reached its lowest point in 40 years, but the grey divorce phenomenon is still on the rise. The Pew Research Center reports that the divorce rate for adults ages 50 and older has roughly doubled since 1990.

In general, grey divorce involves a couple who are over the age of 50 and have gone through a long-term marriage, usually around 20 to 30 years or longer. At this stage, the couple is at a point in their lives where their kids have graduated college and have their own homes and they’re basically all alone with each other. Whether the couple has grown apart, have a hard time living alone with each other, or have another reason, they decide to dissolve their marriage.

While the kids may have moved out at this point, there are many elements that can make grey divorce a tricky situation. Years of marriage can lead to numerous financial assets including complex business arrangements, rigid living scenarios, and other details that can lead to a difficult experience. However, a collaborative approach can provide a splitting couple with the right support and expertise necessary for a successful divorce.

What is Collaborative Divorce?

Some people may think of court rooms and judges when it comes to divorce, but it doesn’t have to come to that point. Collaborative divorce is a form of alternative dispute resolution. In a collaborative divorce, a couple enters a formal agreement to work together to come to a resolution and avoid the courts.

In addition to the divorcing couple, there are a few other people involved in the collaborative process. Each party will need an attorney to advise and assist them throughout the divorce. There may also be a coach or therapist involved to meet with the divorcing couple and help them through the emotional rigors of the experience.

One of the major differences between collaborative divorce and other processes is the presence and help of a financial neutral. The neutral takes on the role of a financial educator throughout the process. This professional will gather the couple’s financial information and study it to get a sense of their situation. The neutral will then explain his or her findings to the couple so that everyone gets the same information and it’s clear everybody has what they need to make a sound, rational decisions for the divorce.
Image of a couple going through a grey divorce. Learn about the collaborative divorce process.

What are the Benefits of Collaborative Divorce Over a Traditional Litigated Divorce?

Collaborative divorce is an option that allows the couple to get a better resolution. Imagine that you’re getting a divorce. When you and your partner go to court, a judge controls the outcome. That means a third party is going to make the ultimate decision on your life, even if they’ll never really know you, your family, or your financial situation.

Collaborative divorce opens your case up to creative solutions that can try to accommodate everyone. Imagine that two siblings are fighting over an orange. If their dispute was decided by a court, one of two things would happen:

  1. The court would award the orange to one of the siblings.
  2. The court might take the King Solomon approach and hack it right down the middle.

As expected, neither of the siblings are typically happy with the results. A collaborative approach allows you get to be much more creative because one of the main questions asked in the dispute is “why?” By asking the right questions, you can find better results.

In the orange situation, you can ask why each sibling wants it. One sibling may want the orange to make juice. The other sibling may want the zest from the rind to make a cake. A collaborative approach can help divide up the assets in a way to, in the best of our ability, give each party what they really want and make them happier with the outcome.

Another notable benefit is that the collaborative process is private. Court records from litigated divorce cases are often available to the public. That means your private information, such as financial numbers and other personal details used in the case, is on file where anyone can see it, whether you want them to or not. Collaborative divorce cases maintain a level of privacy. Once a settlement agreement is filed, any of your private information remains hidden, so nobody can go online or down to a courthouse and dig into your life’s details.

There is a drawback for collaborative divorce. In order for a collaborative divorce to work, both people must be completely on board. If one of the parties decide that they want to go to court because the process is not working, they must fire everyone involved and start over. This is an expensive way to go if they don’t complete the process, but won’t be an issue if both parties are committed to a collaborative divorce.

How Does Grey Divorce Fit in With Collaborative Divorce?

While collaborative divorce is an option for couples of all ages, it can be extremely helpful for long-time marriages. Grey partners tend to accumulate several financial assets because they’ve been in the workforce for a long time. The complexity of their financial situation can make divorce more multifaceted than somebody who gets a divorce in their 20s or 30s after five or 10 years of marriage.

The sheer number of assets can create a financial mess in a traditional divorce. Without proper planning, a grey divorce can put both parties in a difficult financial situation after they split. A financial neutral can help sort through the financial complexity and analyze all of the assets, including businesses, retirement plans, outside investments, annuities, and any other resources.

Since there are typically several different types of assets, the neutral will also spend a lot of time on education, especially if one of the partners wasn’t typically involved in financial matters.

It’s not uncommon for one member of the divorcing couple to not have much knowledge of their financial situation. Most of the time, it isn’t the intent of the other person to deceive them, it’s just the dynamic of the relationship where one person handles the financials and the other person had other duties. Because of that, the neutral works to educate this individual so that they can better understand their financial assets and everyone is one the same page.

Collaboration Instead of Confrontation

Divorce doesn’t need to be a fight. Collaborative is an interest-based process that can help both sides find a common ground instead of having to position themselves against one another in court. With the help of a financial neutral, grey couples can receive a true valuation of their business, cashflow, tax issues, and anything else that is important to them financially. That can allow the couple to separate amicably without knowing what’s to come for both parties.

If you have any questions about collaborative divorce or are in need of a financial neutral, contact us today to talk to one of our experts.