Divorce happens. In today’s world, age doesn’t matter. Young and older couples alike experience divorce. The difference is that younger couples have potentially more years ahead of them from which to bounce back from a divorce and create financial security. An older couple, however, needs to ensure that property division still allows them to retire and enjoy the rest of their years. The longer a couple has been together, however, and the more shared assets they have, the greater the challenge it is to divide them up equally.
At this stage in life, most couples have a nest egg that supports them. During a divorce, it can be surprising when that nest egg that once supported one household, now seems insufficient for two. This is especially true for single-earner couples. The non-earning individual often finds it challenging to enter the workforce and support themselves, without additional spousal support. The bottom line is that older couples have fewer years to financial recover after divorce.
The financial challenges may be hard, but the emotional ones are even harder. Older couples need to think more carefully about the emotional stress of divorce. Most individuals are not prepared to cope with completing everyday tasks alone, such as grocery shopping and cleaning the house. A divorce later in life could also more severely affect their relationships with friends, adult children, and grandchildren. This jeopardizes who they spend time with, especially during holidays and special occasions. Divorce later in life is possible, but couples should analyze the consequences more carefully.
Crucial Elements of Property Division
Real Estate
The house is even more than just a home when it comes to divorce later in life. Emotional connections to the home are even greater, while the potential equity in the home is great as well. An individual may want to remain in the home for sentimental reasons, but equity, reverse mortgage, and other Medicare spend downs, must be divided carefully.
Retirement Plans
Unlike younger couples with a retirement plan that has barely begun, older couple’s retirement plans are a fickle thing to divide. Most couples will need a qualified domestic relations order to properly divide the retirement plan and benefits. Make sure that you are aware of any loans that your spouse may have taken out against the retirement plan, before letting them talk you into a settlement.
Investment Portfolios
A poorly divided investment portfolio can disrupt diversification and risk profile. Investment portfolios have been built and balanced over the years. It takes a skilled professional to divide an investment portfolio successfully, so that couples close to retirement do not risk it all.
Social Security
Social Security is not a common aspect of divorce, unless the marriage has lasted more than 10 years and you are more than 62 years old. In this case, an individual may be able to draw up to 50 percent of their ex-spouse’s social security benefit. This includes the survivor benefit, if your ex-spouse passes away.
Even with all of your ducks in a row and the most professional of help, significant and unique challenges exist with divorce later in life. When more years and investment are put into a marriage, there is more to potentially lose or split up.
