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Split Up but Still Married

A woman worries about post-divorce finances

spinner image Susan Hunnicutt, 63
Sara Stathas

The problem

Stay married or not? That was the question, and it was a complicated one. Nearly six years ago, 30 years after marrying, Susan and Carter Hunnicutt of Milwaukee separated. It has been more than amicable. Susan, a freelance writer, stays in half of the duplex home they own. Carter, a musician and former fire captain, lives elsewhere, the rental income from the duplex’s other half paying for his place. He sends her half of his monthly pension. And she remains on his high-quality, inexpensive fire department health plan. “We’ve been fortunate because we’ve been able to be cooperative,” says Carter, 61. Still, he views their agreement as “a more transitory situation.” Seeing that Carter has a girlfriend and sensing the ground starting to shift, Susan, 63, worries about how a divorce might affect her finances. Where do they go from here?

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The advice

Since 1990, while the overall U.S. divorce rate has been going down, the rate among people 50 and older — a phenomenon sometimes called “gray divorce” — has doubled. The impact is particularly troubling for older women. According to research from I-Fen Lin and Susan Brown, professors of sociology at Bowling Green State University, older women who divorce see their standard of living decline 45 percent, compared with 21 percent for men their age. Gray divorce is distinctive, Brown notes, because it tends to happen after both parties are past their top earning years. But it’s worse for women who “didn’t earn as much on average and may have disrupted or sporadic work histories to raise children or care for parents,” she says. Many find themselves looking for jobs after years of being out of the labor force entirely.

Susan has long suspected that a divorce would put a crimp in her modest lifestyle — one reason she’s encouraged Carter to maintain the status quo. But to suspect is not the same thing as to know. So the two of us sat down with Rhonda Noordyk, a certified divorce financial analyst and CEO of the Milwaukee-based Women’s Financial Wellness Center, to assess the risks involved in following three possible paths.  

1. Stay married. This is clearly a money-saving option, especially for Susan. The Hunnicutts’ taxes are likely lower because they file jointly rather than as married filing separately, as many couples in their situation might do. And Susan’s health insurance premiums remain low. Those joint tax filings and the credit card they share for household expenses are strong proof of their ability to communicate and handle financial affairs, Noordyk says. But there are risks. One spouse could run up big debts that the other could be partly responsible for. Carter, though he shows no indication of this, might stop sending half his pension Susan’s way, Noordyk says. In a worst-case scenario, if one of them needs to go into a long-term care facility, the expense could be a drain on assets for both of them.

2. Get divorced. Though a divorce will bring closure to both of them, it will change the financial landscape. Paying for her own health insurance could run at least several hundred dollars a month for Susan until she qualifies for Medicare. Then there’s housing. The couple’s duplex is worth about $300,000, so if they sold it, she would get $150,000. Susan, who doesn’t want to buy again, says the apartments she’s looked at rent for about $2,000 a month. “At that rate, I’m going to burn through my proceeds in seven years,” she says. The other change a divorce would bring is emotional. Susan isn’t sure she wants that. “For me, part of my identity is still being married,” she says. Which is why, Noordyk says to consider a postnuptial agreement. 

3. Consider a postnup. A postnuptial agreement, much like a prenup, is a legal document often drawn up to outline the terms of a possible divorce before either spouse files. It can also be used to redefine a marriage to help avoid a divorce. The major difference is that it’s crafted after a wedding — sometimes many years later — rather than before. In Susan’s case, Noordyk says, a postnup could reduce her financial risks by codifying the practices the couple have employed for the past half decade, including dividing the pension checks and using the duplex rent to pay for Carter’s housing. Postnups can be complicated, and laws governing them vary by state. To put one in place, it’s essential that each spouse has his or her own attorney, which can run the couple a few thousand dollars.

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The outcome

Susan’s plan is to get a postnup. Carter says the two of them have begun talking about it. Susan has started to apply for full-time jobs, given the possibility of an eventual divorce. “I think my future self would say, It’s a good idea to formalize this in some way,” Susan says. “I think I will be in a place of power if I take the reins and take action.”

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