A Guide to Divorce and Retirement for Lesbians

Same-sex marriages are on the rise, as are same-sex divorces, especially lesbian divorces. Gay divorces rose 40.4% from 2019 to 2020, to 1,154, and the vast majority, 71.3%, were lesbian divorces, comprehensive study finds study of England and Wales. The negative financial implications on retirement for lesbians are greater than those for gay men, experts say.

According to Abbie Goldberg, Ph.D., professor of psychology at Clark University and co-editor of LGBTQ Divorce and Dissolution of Relationships. First, women are more likely than men to initiate divorce, overall: 63% of all opposite-Sex divorces were legally initiated by women, according to the study carried out in England and Wales. Additionally, Goldberg pointed out that lesbian couples have financial struggles — such as both earning less — which can create stress in the relationship.

Unique Lesbian Financial Problems

Marriage equality would have promised divorce equality, but divorcing lesbians are at a significant disadvantage compared to their gay and straight counterparts. This is for several reasons, the first being simple. “It’s important to understand that women make less money than men,” Goldberg said. “And so when women get together, they have less assets together.”

In the case of a direct divorce, women can enjoy the benefits of having been married to men, who generally earn more money. That could mean higher Social Security divorced spouse benefits, higher alimony/spousal support, or a share of the man’s retirement funds and other valuable assets. And of course, men already have the advantage of generally higher wages and assets.

With homosexual couples, since they are both men, they both earn statistically more. Chances are, each man in the couple has his own paycheck to keep him afloat and out of poverty. For example, 61.2% of male-male married couples earn $100,000 or more, compared to 47.8% of female-female married couples, according to 2019 US Census.

They are also less likely to have children than lesbian couples, which means their divorce does not bring the complications that children bring to the table (custody, child support, etc.). For example, 22.5% of married woman-woman couples have children in the household compared to only 6.6% for married man-man couples.

Lesbian parents also face particular challenges. Goldberg said: “In my research and others, we have found that lesbian couples are most likely to adopt children with special needs, including emotional behavior issues, physical challenges, groups of siblings, etc. Children who are adopted at an older age. Children exposed to drugs. This leads to higher expenses for mental and physical health care, which can lead to the couple having fewer assets for retirement.

Jason Owens, divorce and family law attorney at Lynch and Owens in Hingham, MA, raised the financial implications of child support. “The financial consequences of child support and whether someone receives child support carry over into retirement,” he said. This is especially important if the divorce occurs when the child or children are young, which means payments will have to be made for a long time. A similar problem can occur with alimony – it can go up to retirement age.

This does not mean that heterosexual women or homosexuals remain unscathed from divorce. This is simply to say that lesbians have unique challenges, especially since they tend to have less income. In 2019, the median income for male gay couples was $114,182 while it was just $87,289 for lesbian couples, according to the US Census. This ultimately has an impact on retirement. “A lot of lesbians who were divorcing [talked] to have to work longer because they just don’t have the option to retire,” Goldberg said.

Financial protection before marriage

Prenuptial agreements are a great first line of protection, especially for prenuptial assets, said Ryne Vickery, a wealth advisor specializing in LGBTQ+ financial planning at Buckingham Strategic Heritage in Saint Louis. Another common way to use them is to protect potential assets, such as an inheritance. In order to obtain a prenuptial agreement, the party seeking protection will hire a lawyer to create a draft. Then the other party will have another lawyer review it. If all goes well, the soon-to-be-married couple disconnects.

While it’s important to note that if you’re the more vulnerable partner — that can mean a variety of things, from the low-income person to the caregiver — it can actually not be in your best interest to sign a prenup, Owens said. This is because, in divorce without a prenuptial agreement, there will likely be a more equal distribution of assets. Ultimately, the prenuptial agreement is there to protect the person who enters the marriage with more assets.

That said, prenuptial agreements don’t have much say in what happens during a divorce. Although these are powerful legal documents, if the judge determines that it is unfair at the time of the divorce, they will make changes accordingly. For example, if the prenup leaves one partner poor while the other is wealthy, the judge is likely to give the first partner a bit more money to keep them from falling into poverty.

Financial protection during marriage

Postnuptial agreements, while not as common as prenuptial agreements, can be a line of protection, according to Owens and Vickery.

Another way to protect yourself and your money during marriage is to simply maintain “a knowledge of your spouse’s assets, what he has in his retirement account, by paying some attention to the tax returns that you sign,” Owens said. Many people simply don’t know what’s going on with their money, which makes it harder to fight for their equal share during divorce.

Separating your assets can also be a form of protection. This could mean separating retirement accounts, credit cards and savings accounts rather than combining them.

However, if you’re the more vulnerable partner, it might actually be in your best interest to combine the assets, which could result in a more equal split in divorce.

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Financial protection during divorce

Although many lesbians choose to use mediation to settle their divorce, sometimes it is not the best choice for everyone. Mediators are looking for agreement, not necessarily equality, which means there could be a very unequal distribution of assets in the end. Vickery suggests that you “work with someone like a lawyer or someone who is going to make sure you get what you deserve and that you think through everything. Otherwise, you can be taken advantage of. In addition to lawyers, financial planners are an excellent resource. However, working with experts is expensive and not everyone can afford it. In fact, the affordability of mediation is one of the reasons people go this route in the first place.

If you can afford to work with professionals, it’s important to find knowledgeable experts on LGBTQ issues. Goldberg said, “You can be gay friendly and not be very knowledgeable about the unique issues of same-sex divorce.”

Ultimately, you deserve to be happy and financially secure.

Goldberg noted that “arguably the ability and willingness of women to get out of a bad relationship is protective.” Although divorce can be upsetting and sometimes devastating to an individual’s finances and retirement, sometimes it is the best decision. You can get out of divorce with minimal financial harm if you have the right protections in place (and the means to have them, in the first place).

And that doesn’t mean that lesbians shouldn’t get married, either. Lesbians, like everyone else, deserve the right to show their love for each other and have their relationship recognized by the government. They deserve the same financial benefits as everyone else, like joint tax filing and health insurance. Divorcing doesn’t mean the relationship wasn’t worth it either. Sometimes the relationship could have been worth it, but divorce is the right decision now.

Ultimately, it’s very important that you are happy and make choices to take the best financial care of yourself and your retirement.

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Image: Women, Divorce and Retirement

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