Gray Divorce—Unique Challenges for Couples 50 and Up in Vermont
August 20, 2025

Understanding retirement accounts, health insurance, and estate planning in later-life divorce

Divorce is challenging at any age. But when it occurs later in life, it comes with a unique set of emotional, financial, and legal considerations. Known as “gray divorce,” this trend is on the rise nationwide, and Vermont is no exception. Whether it’s a couple who’s grown apart after decades together, a second marriage that didn’t work out, or an unexpected separation due to changing needs or values, older Vermonters face specific challenges when untangling their lives.

If you’re over 50 and thinking about divorce — or already in the process — it's important to understand how Vermont law impacts key issues like retirement savings, health insurance, and long-term financial security.


Dividing Retirement Benefits in Gray Divorce

One of the biggest financial concerns for older couples is how divorce will affect retirement savings. In Vermont, retirement accounts — including 401(k)s, pensions, IRAs, or other investments — are generally considered marital property if they were earned or contributed to during the marriage.

These assets are subject to equitable distribution — meaning a fair division, not necessarily an equal one. However, splitting retirement accounts is not as simple as taking a number and dividing it in half. Depending on the type of account, you may need a Qualified Domestic Relations Order (QDRO) or other legal tools to divide funds without triggering taxes or penalties.

A thoughtful approach is key to ensuring both spouses can maintain financial stability during retirement.


Health Insurance After Divorce

In a gray divorce, health insurance can be a major issue — especially if one spouse has been relying on the other’s employer-based coverage. Once the divorce is finalized, coverage typically ends for the non-employee spouse.

Here are options to consider:

  • COBRA—Allows temporary continuation of coverage (at full cost) for up to 36 months.
  • Vermont Health Connect—Offers individual health insurance plans, sometimes with subsidies depending on income.
  • Medicare Eligibility—If one or both spouses are 65+, Medicare may be available — but understanding enrollment timelines and supplemental coverage options matters.

Making the right choice can have a significant impact on both cost and quality of care during your later years.


Estate Planning Must Be Updated

Many divorcing couples overlook estate planning — but for those 50 and older, it’s essential. A divorce should prompt a full review of all important documents, including:

  • Wills and trusts
  • Powers of attorney
  • Health care proxies
  • Beneficiary designations (insurance policies, retirement plans, etc.)

These documents likely name a spouse in key roles — and unless updated, they may leave your ex-spouse with unintended control over your medical, financial, or estate matters. Vermont courts encourage this reassessment to ensure your future wishes are clearly and legally defined.


Emotional and Lifestyle Impacts

Gray divorce isn't just about finances — it's about rebuilding life at a stage when identities are deeply intertwined. Many older adults face questions like:

  • Where will I live now?
  • How will I manage life alone after decades of marriage?
  • What does my social circle look like now?

Navigating these questions with support — both legal and personal — can help create a healthy path forward.


Legal Guidance During a Later-Life Divorce

At Deppman Law PLC, we understand the financial and emotional complexities of gray divorce in Vermont. Our goal is to help you make confident, informed decisions about your future. Contact our office today to schedule a consultation and ensure that your next chapter is protected, both legally and financially.

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