According to a study from Bowling Green State University, 1 in 4 people getting a divorce these days is over the age of 50. This is a marked increase over the 1 in 10 older Americans seeking divorce twenty years ago.
Researchers believe “Gray Divorce” is more common today for a number of reasons.The increase may be tied to the economic independence of women, who no longer have to choose between staying in a bad marriage or facing financial hardship.The fifty-plus divorce trend may also be the result of increased life spans, which leads some to opt for a different future when things start to stagnate in the marriage, particularly after children have grown up and left the home.
Regardless of the cause, divorce in the latter part of life has unique financial implications, particularly when it comes to retirement plans. Assets are often cut in half and expenses for newly divorced singles rise.There isn’t time to enhance portfolios significantly post-divorce, so it is important to reach the best settlement to ensure you get your fair share of the retirement funds.
Susan Brown, the co-director of the National Center for Family and Marriage Research, recommends that older people facing divorce “find a really good attorney” to fight for their rights when it comes to divvying up retirement plans. Making mistakes now, can cost thousands later.
Financial prowess is needed early in the battle over retirement funds. The inventory of assets that couples submit should be carefully scrutinized to ensure that all assets are listed, including often overlooked deferred-compensation or stock options. Some attorneys recommend adding a clause to the divorce settlement agreement stating that assets discovered post divorce will be divided in half to protect clients from losing hidden or forgotten assets.
Once on the inventory, defined-contribution plans and pensions offered by employers are typically divided by using court orders called qualified domestic relations orders, or Q.D.R.O.s. Filing the orders accurately according to unique, individual situations is paramount. Finding an attorney well-versed on filing these orders ‘correctly’, ‘the first time’, can save time and money.
When all assets are accounted for and other post marital entitlements have been considered such as alimony, considering the overall tax treatment should figure prominently in the calculation of a fair split.
Divorcing later in life is on the rise and securing your financial future is important. The ability to chart a new life course often hinges on good decisions made during the divorce process. If you are considering divorce please contact the Law Office of Ronald Bell. We are here to help.
Source: NY Times, “Retirement Plans Thrown Into Disarray by a Divorce”, by Constance Gustke, June 27, 2014