Divorce after the age of fifty is different from divorce when you are of a younger age.
Spouses can divorce later in life for the same reasons younger spouses do – someone cheats, financial stresses, regrets concerning previous decisions, or a want for more freedom. But when you’re over the age of fifty, these reasons are surrounded by getting older and the realizing that there are more years behind you than ahead. Older couples face unique aging-associated issues that can cause the decision to get divorced — including concerns of health, pressures caused by living in closer proximity throughout retirement, the loss of parents and friends, and even the disturbing loss of youth.
Whereas there are differences in the emotional effect of divorce for spouses that end their marriage later in their lives, the greatest difference there’s less time to financially recover, and this reality colors many of the matters that are distinctive to later in life divorces. When you are filing for divorce later in life (or maybe thinking about it), below is a glimpse at some of the difficulties you may face.
Asset Division at Divorce
A part of your divorce process is going to be the division of your assets with your spouse. The worth of an asset is not always going to be the only concern when making these decisions, since some assets are going to be more useful to you later in your life than others. For instance, you might have difficulty deciding who is going to keep the house for several reasons. Below are several kinds of assets.
Keeping the house provides you with future benefits that could be more important the older you are due to the below factors.
- Age leads to qualification for real estate property tax breaks and waivers.
- You are qualified for a reverse mortgage starting at age sixty-two. Reverse mortgages offer a potential flow of income.
- Primary residences get special treatment for those eligible for public benefits (for instance, Medicaid).
- Tax benefits like deductions for mortgage interest and taxes and exemptions from earnings upon sale could be important in later years.
- Owning your home means you have possible rental income.
- Keeping your home means you are going to have access to capital even when you choose to downsize.
The division of retirement plans can be complex and requires meticulous attention when your lawyer is preparing the final documentation for your divorce. You might require a separate court order, typically known as a Qualified Domestic Relations Order to cover the dividing of retirement benefits. Prior to making any decisions concerning retirement, acquire a copy of the Summary Plan Description from the retirement plan director. You need to most likely talk to a lawyer and find out about:
- The time you can receive allocations and still bypass tax penalties
- if you are able to get survivor benefits should your spouse pass away, even following the divorce
- when your spouse has taken any loans towards a 401(k) plan that needs to be repaid prior to the funds being divided
- if you are entitled to any offerings made to retirement plans following the divorce
- when you can receive a hardship withdrawal, should you need one, and
- when you are a civilian spouse having military retirement benefits in the divorce if your rights are safeguarded through the military’s Survivor Benefit Plan.
Social Security benefits aren’t assets that a divorce court is able to split, but the regulations concerning benefits are related to your post divorce earnings.
When your marriage has lasted more than a decade and you are sixty-two years of age or older, you can gather retirement benefits from your ex-spouse’s Social Security record, devoid of reducing your former spouse’s benefits, even following your divorce — welcoming news when you’ve been out of the workforce throughout your marriage. Also bear in mind:
- You might qualify to draw benefits of up to fifty percent of your ex-spouse’s benefit.
- You are able start getting retirement benefits at sixty-two years of age on either your Social Security record or on your former spouses, then change to the other benefit when you get to full retirement age (when the other benefit is increased).
- After being divorced for at a minimum of two years, you are going to be entitled to benefits through your ex-spouse even when your former spouse is qualified but not yet receiving their benefits.
When your ex-spouse dies, you might be eligible to receive survivor benefits of all of your ex-spouse’s Social Security benefit. The fundamental requirements are:
- the marriage lasted at a minimum of a decade
- you are at a minimum of sixty years of age, and
- you are not entitled to retirement benefits equivalent to or greater than that of your ex-spouse’s benefit.
Head to the Social Security Administration’s website at www.ssa.gov for more information and to acquire a up to date Statement of Earnings for you and your spouse.
A lot of us plan to cruise in our later years. When you abruptly find yourself getting a divorce, you might also discover you are going to be expected to live on less than you thought. You might be forced to re-enter the workforce or work longer than anticipated. These are the reasoning why financial planning becomes vital in later in life divorces. Specifically, it makes sense to:
Calculating living expenses. Calculating a post divorce budget is going to help you determine your income requirements and find out which assets are going to better fulfill those needs.
Strive for a diverse portfolio. The value of a diverse portfolio is more significant now. This is not the time to place your future on a sole asset. The home and retirement plan might be the degree of your marital estate but staying adaptable concerning how they are split is important.
Learn about tax repercussions. When younger couples get divorced, income tax significance of future retirement plan distributions are often ignored when assessing retirement assets, due to it’s mere conjecture. In later life divorces, on the other hand, decreasing an asset’s worth in the property division to account for probable tax repercussions is fitting.
Understand the time value of money. Spousal maintenance, property buy-outs, and other types of delayed payment needs an understanding of how the value of money deviates over time. Calculations for today’s value, down the road value, and the impacts of inflation are important financial planning devices.
Generate income. Obviously, you are going to need to figure out a way you can earn income. You should also estimate assets for likely passive income, such as rent, dividends, and revenue from businesses not requiring you to be directly involved.
Concerns of Health
Significant health conditions can impact how a marital estate is split and if one spouse requires spousal maintenance, particularly if that spouse us unable to earn income and doesn’t have adequate assets for living on. And a spouse with a significant cognitive disability might require a court-appointed guardian or guardian ad litem to offer delegate decision making.
The expense and accessibility of health care are significant concerns for those over age fifty that are trying to bridge the narrow to Medicare qualification.
Throughout and following your divorce, it’s vital to assess the beneficiaries you’ve appointed in wills and/or retirement plans, in addition to agent designations through medical directives or POA, to make sure your documentation is a reflection of your desires. Estate planning is an essential part of your divorce settlement in several ways.
- You might wish to cut a deal to receive or offer death benefits from life insurance, a retirement plans, wills, or trusts.
- Wills or life insurance policies can offer security for debts, spousal maintenance, and property buy-outs.
- The divorce settlement can determine trusts to offer for agreed-upon responsibilities like grandchildren’s schooling or financial support for grown children.
Other Specific Issues
A couple of other issues exclusive to later in life divorces are worth taking note of. One is the role of grown children, that do not avoid the emotional effect of their parents’ getting divorced — particularly when they are still not financially independent. At the same time, grown children can influence their parents’ divorce (one way or another) by taking on a multitude of roles ranging from “Confidant” to “Mediator.”
One other unique later in life divorce question is whether or not to resolve financial issues through separation and post-marital agreements, instead of through a full-blown legal divorce. Leaving the legal marriage undamaged whereas settling the financial aspect enables spouses to:
- keep marital standing undamaged until a spouse becomes qualified for Medicare
- bring a military marriage to the ten year or twenty year point that enables the civilian spouse to receive specific benefits
- fulfill the ten year eligibility when an “ex-spouse” is qualified for Social Security benefits
- alleviate financial imbalances, or
- remain married for personal and/or spiritual reasons.
Nolo. (2011, October 10). Financial planning after divorce. www.nolo.com. Retrieved April 22, 2022, from https://www.nolo.com/legal-encyclopedia/special-issues-late-life-divorce-32335-2.html
Choose the Right Divorce Lawyer in Arizona
Regardless of the choice you make, it’s important you make the best choice for you when hiring a divorce attorney. Remember: The decisions you make now can affect your future. Ultimately, choosing the best lawyer will depend on which lawyer feels best for you and your situation.