According to most experts, the overall divorce rate in the United States is on the decline. However, the divorce rate for individuals over age 50 has doubled in the last several decades. Older individuals who divorce deal with a much different set of challenges than younger couples. Furthermore, the financial impact of divorce is often much greater for older adults than younger adults. If you are over age 50 and you are considering divorce, make sure to keep the following considerations in mind.
Property Division in a “Gray Divorce”
Divorce involving spouses nearing retirement age has been nick-named “gray divorce.” Individuals in their 50s, 60s, and 70s, have decades worth of accumulated assets. Many individuals entering into a grey divorce also own complex assets like investments, real estate, small businesses, and professional practices. Whether property division is resolved through an out-of-court agreement or litigation, assets must be accurately valued before they can be divided.
In addition to valuing assets, the identity of the property must be determined. Per Texas law, property and debt that is accumulated by either spouse during the marriage is community property. Assets acquired through inheritance or gift are exceptions to this rule. Separate property includes property that a spouse owned prior to getting married. Both spouses are entitled to a fair share of property classified as community property.
401(k)s, IRAs, and Other Retirement Accounts
One of the most crucial issues in a grey divorce is the division of retirement benefits. Retirement funds that were accumulated during the marriage are community property to which both spouses are entitled. Retirement funds are often divided between divorcing spouses using a legal instrument called a Qualified Domestic Relations Order (QDRO). Because the value of defined benefit plans are not known until a worker reaches retirement, pensions are often handled differently during divorce than other types of retirement accounts – especially if the spouse is still working at the time of divorce. Only the portion of the pension or retirement account that was accumulated during the marriage is considered community property. Contributions that a spouse made before getting married are considered separate property. Social security benefits and military retirement benefits are only divided between divorcing spouses if the spouses have been married for at least ten years.
Contact a Plano Divorce Lawyer
If you are over age 50 and planning to divorce, contact Collin County divorce attorney Brian Bagley for help. At The Law Office of Brian Bagley, PLLC, we understand the unique financial challenges that older adults face during divorce. Our team can help you meet these challenges head-on and resolve divorce issues as quickly and effectively as possible. Call our office today at (972) 843-7158 today for a free consultation.