Seniors Splitting Up: Financial Considerations In A Gray Divorce
Divorce rates for older Americans have been steadily rising in recent years, with the rate of divorce among people 65 and older more than doubling since 1990, according to The Washington Post. While every couple faces difficult financial decisions in a divorce, older couples who are retired or close to retirement can have particularly difficult financial issues that must be addressed.
Splitting Retirement Accounts
Filing for a divorce in your twilight years will most likely mean negotiations over retirement accounts and pension plans both partners accrued during the marriage. Dividing these financial assets can be a long and difficult process, particularly if one spouse was the primary earner while the other stayed home to take care of children and the home. Even if your divorce is going to be an amicable one where you're working together to make sure each person comes out on the other side of the divorce with his or her fair share, it's best to consult with a divorce attorney to help you draft a Qualified Domestic Relations Order. This document prevents spouses from owing taxes on funds from retirement accounts transferred from one person to the other.
Collecting Social Security
Social security retirement benefits are a big part of calculating income and property division in divorces between older partners. If you were married for at least 10 years, you'll be able to start collecting on your former spouse's Social Security once you're 62 years old if your own retirement benefit isn't higher than your ex's. This only applies if you do not remarry, however. Once you enter into another marriage, you'll lose your claim to your ex-spouse's Social Security in favor of your new spouse's benefits.
Health Concerns
It's not uncommon to require additional care as you age, and medical bills can begin piling up quickly, even with Medicare shouldering a lot of the burden. Older couples who stay married have a safety net provided by the other spouse if they need additional care. If you'll be living on your own after the divorce, look into picking up some long-term care insurance to help cover the costs of in-home nurses or long-term care facilities. Ideally, it's best to pick this up when you're younger and still married, but some companies still over plans to older adults, albeit at a higher premium.
It's best for both spouses to consult with divorce attorneys once they've decided to begin the process. An attorney, such as Tise Allan Brandon, can advise you about the specific laws in your state and individual considerations for your unique situation to help ensure the divorce goes as quickly and fairly as possible.