It has often been said that the reason divorce is so expensive is because it is worth it. However, older couples contemplating divorce need to think before they leap because elder couples have less time to recover from their mistakes. According to a study at Bowling Green State University, divorce rates for couples older than 50 doubled between 1990 and 2008. In fact, divorces for couples over the age of 50 now represent over one fourth of all U.S. divorces.
Health Insurance:
People who divorce after age 50 but before 65 when Medicare eligibility begins may face difficulty finding affordable health insurance. Consequently, any divorce settlement agreement needs to consider the individuals health and needs for insurance coverage.
RETIREMENT PLANS:
Even if an IRA or a 401(k) is only in the name of just one spouse, the other spouse has a right to claim a portion of that account. That portion may vary according to the law of the state in which the divorce is filed. In community property states, both partners jointly own the retirement account even if it is only in one spouse's name. In non-community property states, retirement assets will be divided according to the divorce property settlement agreement. With older divorcees, it is important to get a fair share of retirement savings. Before agreeing to a division of retirement plan assets, remember that taxes must be taken into account when dividing assets.
Money can be withdrawn tax-free from Roth IRA accounts in retirement. There are tax penalties for early withdrawal. Furthermore, investments such as stocks rise and fall with the market. The parties need to specify if the division of assets is based on a percentage of the whole or upon a fixed dollar amount.
If a traditional defined-benefit pension (a pension that pay a steady monthly income during retirement) is involved, than a “qualified domestic relations order” (QDRO) may be necessary to tell the plan’s sponsor how benefits are to be divided. With a defined-benefit plan, it is necessary to obtain a copy of the summary plan description from the employer or plan administrator.
If a plan provides that an “alternate payee” may not receive benefits until the plan member retires, than you may need to negotiate for alimony or some other compensation to make up for lost pension income should the plan member choose to work past normal retirement age.
If a pension pays joint and survivor benefits, it may be necessary to determine whether the original spouse or a subsequent spouse is considered the survivor. Make sure that any money transferred from an IRA or 401(k) is handled as a trustee-to-trustee transfer in order to avoid penalties and taxes.
LIFE INSURANCE:
Longstanding life insurance policies can be valuable assets. If you are the spouse who is insured, do not stop paying premiums. A life insurance policy can be a valuable asset in divorce. Agreeing to continue funding the policy may reduce your future alimony payments or can be made to benefit the children. One missed payment could forfeit the coverage so try to make sure premiums are paid.
HEALTH INSURANCE:
Health insurance for those over the age of 50s or early 60s can be expensive. COBRA allows divorcees to continue to receive coverage through an ex-spouse’s employer group plan for up to 36 months. A divorce agreement should specify who is responsible for paying the COBRA premiums. If you are close to 65, consider delaying your divorce until you qualify for Medicare.
THE HOME:
Don't get stuck with a home that is larger than you need or one that you cannot sell at a reasonable price. Liquid assets are preferable to assets that are difficult to sell. If you choose to sell the house, one of the parties should reside in the home until it is sold.
BENEFICIARY DESIGNATIONS:
After a divorce, change the beneficiary designations in your investment accounts and in your will. Remove your ex spouse from all joint accounts. Unless there is an order to the contrary, remove your ex from the list of beneficiaries of any life insurance policy that you may own. Nothing can be more frustrating to family members than seeing an ex spouse receive death benefits that were not intended to be shared with the ex.
RELOCATION:
Consult a family law attorney before you relocate. Divorce laws vary from state to state. It may be more advantageous to file for divorce before you move to a new state.
In sum, divorce is seldom pleasant. It is seldom a financial bonanza. Nevertheless, for older couples contemplating dissolution of marriage, planning is something that must take place. Failing to properly realize the unique circumstances of elderly divorcees can result in an avoidable financial disaster.
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6 comments:
More intellectual stuff!
Where is the humor in old geezers planning for divorce?
This is good info
People over 50yrs getting divorced at a high rate…I’m not surprised, people get sick of looking at eachother for that long. I think the problem is that people get married for the wrong reasons and it is usually based on finance.
Scientifically…there have been studies that prove when a couple has a child, endorphins are released that causes a desire for eachother, that we call love, and can last for seven years…after that the eye can start to wander and the saying, “The seven year itch” applies. Should another child be born into the relationship, these endorphins are released again. The theory is that as hunters and gatherers we developed these endorphins to insure the survival of the species as it takes about seven years for the siblings of these ancient tribes to travel on their own with the tribe, without the help of both parents. And the wondering eye is to insure a good gene pool lessoning the chance of inbreeding. So in theory, the human species was not meant to be monogamous and lifetime partners, unless children under the age of 7 are of presence in the relationship.
I know of more older males who are importing Russian brides…they don’t have to talk to them much because they don’t know our language very well, and if they become to wise to our divorce laws…they can be sent back like a defective vacuum-cleaner…LOL (much sarcasm here)
Positive aspect of a Russian bride:
·Plane ticket is less expensive than a formal wedding.
·Language barrier prevents any explanations of your actions and her ability to have American girlfriends to talk behind your back.
·No in-laws to visit during the holidays.
·Lack of knowledge of traditions and holidays means bowling day can be now considered a holiday.
·Because of the brides primitive background a simple roof over her head and a washing machine will give her a since of wealth.
·Lack of fashion sense means goodwill is a good source for her cloths.
·Can’t use your credit card to buy nick-knacks and new furniture.
·Can take her hunting with you since she is experienced at skinning wild animals.
·Her experience with cooking bad cuts of meat and wild prey will make her excellent at barbeque.
·Can’t drive so you will always know where she is at.
·Language barrier prevents her from watching Oprah and thinking for herself.
·Can trade her in for a new model before she learns the language and when you are tired of looking at her.
·If she becomes aware of our divorce laws, turn her in as a Russian spy and have her deported and sent back on the governments dime.
Video guys solution is cheaper than a prenuptial agreement
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