A Guide to Lesbian Divorce and Retirement
Same-sex marriages are on the rise, and so are same-sex divorces, particularly lesbian divorces. Same-sex divorces rose 40.4% from 2019 to 2020, to 1,154, and the vast majority, 71.3%, were lesbian divorces, according to an in-depth study from England and Wales. The negative financial implications on lesbians’ retirement are greater than those of gay men, experts say.
There are many reasons that lesbians divorce at higher rates, according to Abbie Goldberg, Ph.D., a psychology professor at Clark University and co-editor of LGBTQ Divorce and Relationship Dissolution. Firstly, women are more likely than men to initiate divorce, in general: 63% of all opposite-sex divorces were legally initiated by women, according to the study from England and Wales. Additionally, Goldberg pointed out that lesbian couples have financial challenges — such as both being lower earners — that can create stress in the relationship.
Unique financial issues of lesbians
Marriage equality allegedly promised divorce equality, but lesbians who divorce are significantly disadvantaged in comparison to their gay male and straight counterparts. This is for a number of reasons, the first one being simple. “It's important to understand that women make less money than men,” said Goldberg. “And so when women get together, they have fewer assets together.”
In the case of straight divorce, women are able to reap the benefits of having been married to men, who are typically higher earners. This could mean higher Social Security divorced spousal 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 typically higher salaries and higher assets.
With gay couples, since they are both men, they both statistically earn more. Chances are, each man in the couple has his own salary to keep him afloat and out of poverty. For instance, 61.2% of male-male married couples earn $100,000 or more as compared to 47.8% for female-female married couples, according to the 2019 U.S. Census.
They’re also less likely to have children than lesbian couples, meaning that their divorce doesn’t have the complications that children bring to the table (custody, child support, etc.) For instance, 22.5% of female-female married couples have children in the household as compared to just 6.6% for male-male married couples.
Lesbian parents have specific standout challenges, as well. Goldberg said, “In my research and others, we found that lesbian couples are the most likely to adopt children with special needs, including emotional behavioral issues, physical challenges, sibling groups, etc. Kids who are adopted in older age. Kids who are drug exposed.” This leads to higher expenses for mental and physical healthcare, which can cause the couple to have fewer assets for retirement.
Jason Owens, a 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 gets child support reverberate through all the way to retirement,” he said. This is especially impactful if the divorce occurs when the child or children are young, meaning that the payments will have to be made for a long time. A similar issue can happen with alimony — it can go all the way until the age of retirement.
This isn’t to say that straight women or gay men go unscathed by divorce. It is simply to say that lesbians have unique challenges especially since they tend to have less income. In 2019, the median income for gay male couples was $114,182 while it was only $87,289 for lesbian couples, according to the U.S. Census. This ultimately has an impact on retirement. “Many lesbians who were divorcing [talked] about having to work longer because they just don't have the ability to retire,” said Goldberg.
Pre-marriage financial protection
Prenuptial agreements are a great first line of protection, particularly for pre-marital assets, said Ryne Vickery, a wealth adviser specializing in LGBTQ+ financial planning at Buckingham Strategic Wealth in St. Louis. Another common way they are used is to protect prospective assets, such as an inheritance. In order to get a prenuptial agreement, the party seeking protection will hire a lawyer to create a draft. Then, the other party will have a different attorney review it. If all goes well, the soon-to-be-married couple signs off.
Although it is important to note that if you are the more vulnerable partner — this could mean a variety of things, from the lower earner or the person who provides the childcare — it may actually not be in your best interest to sign a prenuptial agreement, Owens said. This is because, in the divorce without a prenuptial agreement, there will likely be a more equal division of assets. In the end, the prenuptial agreement is there to protect the person who is coming into the marriage with more assets.
That said, prenuptial agreements don’t have all the say in what happens in a divorce. Although they 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 prenuptial agreement would leave one partner in poverty while the other is wealthy, the judge is likely to give a bit more money to the first partner in order to prevent them from going into poverty.
Financial protection during marriage
Postnuptial agreements, although 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 simply to maintain “an awareness of what your spouse's assets are, what do they have in their retirement account, sort of paying attention to the tax returns that you sign,” Owens said. Many people simply do not know what is going on with their money, which makes it harder to fight for their equal share during the divorce.
Keeping your assets separate can also be a form of protection. This could mean keeping retirement accounts, credit cards, and savings accounts separate rather than combining them.
However, if you are the more vulnerable partner, it might actually be in your interest to combine assets, which could result in a more equal division during the divorce.
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Financial protection during divorce
Although many lesbians choose to go the mediation route for sorting out their divorce, sometimes this isn’t the best choice for everyone. Mediators are looking for agreement, not necessarily equality, meaning that there could be a very unequal split of assets in the end. Vickery suggests you “work with somebody like an attorney or someone who's going to make sure that you are getting what you deserve and thinking everything through. Otherwise, you can get taken advantage of.” In addition to attorneys, financial planners are a great resource. However, working with experts is expensive, and not everyone can afford it. In fact, the affordability of mediation is one of the reasons why folks go that route in the first place.
If you do have the means to work with professionals, it is important to find experts who are competent in LGBTQ issues. Goldberg said, “you can be gay friendly and not be very competent in the unique issues of same-sex divorce.”
In the end, you deserve to be happy and financially secure
Goldberg noted that, “arguably, women's ability and willingness to get out of a bad relationship is protective.” Although divorce can upend and at times be devastating to an individual’s finances and retirement, sometimes it is the best decision. You can come out of the divorce with minimal financial harm if you have the right protections in place (and the means to have them, in the first place).
And all of this doesn’t mean that lesbians shouldn’t get married in the first place, either. Lesbians, along with all other people, deserve the right to show their love for one another and have their relationship recognized by the government. They deserve to have all the same financial benefits as everyone else, like joint tax filing and health insurance. Getting divorced also doesn’t mean that the relationship wasn’t worth it, either. Sometimes the relationship could have been worth it, but divorce is the right decision now.
In the end, it’s most important that you’re happy and making choices to take the best financial care of yourself and your retirement.
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