Divorce is never easy, but separating later in life — often called “grey divorce” — brings its own unique challenges. By the time couples reach their late 50s, 60s, or beyond, they have usually spent decades building a life together. This can include the family home, superannuation, investments, businesses, and sentimental possessions collected over a lifetime. Untangling all of this in a fair and lawful way can be emotionally taxing and financially complex.
In a grey divorce, there’s often no long runway left to rebuild wealth before retirement. The stakes can be higher, as the decisions made during property settlement will directly affect the lifestyle and security of both parties for the rest of their lives.
Ella Hickman, of Hickman Family Lawyers in Perth, shares her insights into what you need to consider when it comes to property settlement in grey divorce.
Dividing The Nest Egg: Property Settlement Considerations In Grey Divorce
In Australia, property settlement after divorce or separation involves identifying all assets and liabilities, valuing them, and determining how they should be divided in a way that is “just and equitable” under the Family Law Act 1975.
For those divorcing later in life, this process is often more complicated, as there are usually more assets — and more emotional attachment to them — than in a shorter marriage. Retirement plans, superannuation balances, and even potential inheritances can become central to negotiations. Grey divorce property settlements require careful attention to current needs, future income potential, and the lasting impact on both parties’ financial wellbeing.
Where To Start With Dividing Your Property
The first step is to take stock of what you and your former partner own and owe. This means making a complete list of all assets and liabilities, regardless of whose name they are in. Under Australian family law, it doesn’t matter if an asset is solely in your name — if it was acquired during the relationship, or even brought into the relationship in some cases, it may still form part of the property pool.
Property settlements consider not just the family home, but also secondary properties, vehicles, bank accounts, shares, investments, businesses, superannuation, valuable personal items (such as jewellery, art, or antiques), and liabilities like mortgages, personal loans, and credit card debt.
It’s also worth noting that “property” isn’t limited to tangible items — it can include interests in trusts, unpaid entitlements, and future financial resources.
In grey divorce, the challenge is often the emotional connection to long-held possessions and the home you’ve lived in for decades. While it’s natural to want to keep certain assets, being realistic about their value and your ability to maintain them is important. This is the stage where clear thinking and thorough documentation will make the process more manageable.
Determining Your Total Asset Pool
Once all assets and liabilities are identified, they must be valued. This is known as determining the “asset pool” and is a critical step in any property settlement. For real estate, this might involve obtaining formal valuations. For superannuation, you’ll need up-to-date balance statements and sometimes actuarial valuations if pensions are involved. Investments, businesses, and collectables may require specialist appraisals.
In later-life divorces, the asset pool can be more complex because it often includes a combination of real estate, retirement savings, and investments accumulated over many years. There may also be overseas assets, inherited items, or assets held in family trusts.
Both parties are required by law to provide full and frank financial disclosure. This ensures transparency and fairness in negotiations. Omitting or hiding assets can have serious legal consequences.
The size and composition of the asset pool will form the basis for negotiations or court decisions about division. This step is about getting the full picture before any decisions are made. In a grey divorce, this accuracy is vital, as you may not have the time or earning capacity to recover from a miscalculated or unfair division.
What About Your Superannuation?
Superannuation is often one of the largest assets in a grey divorce, and many people are surprised to learn that it can be divided between separating partners. Under Australian family law, superannuation is treated as property, even though it is held in a trust and subject to strict rules about when it can be accessed.
Superannuation splitting laws allow funds to be divided by agreement or court order. This doesn’t necessarily mean you can withdraw the funds straight away — the split is recorded, and each party will receive their share when they meet the conditions of release (usually reaching preservation age or retirement).
For couples nearing or already in retirement, superannuation can be a crucial source of income. Decisions about splitting super should take into account not just the current balances but also the projected income each person will receive. This may require actuarial calculations, especially if defined benefit funds or pensions are involved. Getting financial advice is highly recommended.
In a grey divorce, superannuation division can dramatically affect each person’s retirement lifestyle. It’s important to understand the tax implications, preservation rules, and the long-term impact on income before agreeing to any split.
Working Out Current & Future Needs
The Family Court considers both parties’ current and future needs when deciding how to divide property. For younger couples, factors like future earning potential and the ability to retrain or re- enter the workforce carry significant weight. In grey divorce, however, these factors are very different.
At or near retirement age, there is often limited capacity to increase income or rebuild savings. The court may consider factors such as health, life expectancy, living arrangements, and whether either party will be a primary carer for grandchildren or other dependants.
Future needs also involve looking at ongoing costs — for example, whether one party will require additional medical care, or whether maintaining the family home will be financially sustainable.
In grey divorce, it’s critical to make realistic assessments about living expenses and income sources not just in the immediate future, but also for the years ahead. These considerations often play a central role in determining what is “just and equitable” in the division of assets.
Financial vs Non-Financial Contributions
Australian family law looks at both financial and non-financial contributions made during the relationship. Financial contributions are relatively straightforward — income earned, assets purchased, or direct financial investments in property or businesses.
Non-financial contributions can be equally important. These might include caring for children, managing the household, supporting a partner’s career, or maintaining and improving the family home. In long-term marriages, one partner may have made more financial contributions while the other took on the role of homemaker and caregiver.
In a grey divorce, decades of non-financial contributions are often a significant factor in property settlement. For example, a spouse who did not earn a high income but raised children, cared for elderly relatives, and maintained the home has still contributed substantially to the family’s asset base.
The court will weigh all these contributions when determining a fair division. The length of the relationship often means that contributions — both financial and non-financial — are considered roughly equal, but each case is unique.
What About The Kids?
While “kids” in a grey divorce are often adults, their interests can still be relevant — particularly when it comes to inheritance and intergenerational wealth planning. For many over-60s, ensuring that children and grandchildren eventually benefit from certain assets is a priority. Dividing property in divorce can affect these intentions. For example, selling the family home or splitting superannuation may change what is ultimately available to leave as an inheritance. If one party remarries or enters a new relationship, their estate planning arrangements may also change, potentially impacting the next generation.
In some cases, assets such as family businesses or farms are intended to be passed down to children. Divorce can complicate these plans, especially if the business forms part of the divisible asset pool. It’s important to address these concerns during property settlement negotiations and to review wills, powers of attorney, and other estate planning documents after separation. While the court’s role is to divide property fairly between spouses, forward planning can help protect the interests of future generations.
Divorcing later in life comes with unique challenges — emotionally, financially, and practically. Dividing a lifetime’s worth of assets requires careful thought and a clear understanding of the law. For those in or approaching retirement, the outcomes of a property settlement will have lasting consequences. Consulting an experienced family lawyer and a qualified financial planner can help to ensure that your rights are protected and that the settlement reflects both current realities and future needs.