It is becoming more common for couples in their 50s and older to divorce. Couples who are further along in life have particular issues that are more likely to come up in divorce, and other issues that may not be as applicable. For example, older couples are less likely to have children still at home. Since child support usually ends at 18 or 21, depending on the state, this is less likely to be an issue. If there are children still home they are most likely older and able to be part of the decision making process around custody and parenting plans.
Like all divorcing couples, couples going through a late-life divorce will have to figure out how to divide assets. However, there are special issues in these divorces around asset division. One of those issues has to do with the house. When individuals get to be a certain age, they may be more likely to have health issues and need to rely on public programs like Medicaid. Medicaid eligibility requires having assets under a certain amount. However many of these programs have partial or total exemptions for the house you live in. So, $10,000 in home equity may be more “valuable” in some ways than $10,000 in cash. There are also tax benefits to keeping the house. After a certain age homeowners may also be eligible for age-related property tax exemptions and other tax benefits related to owning a home.
People who are divorcing later in life will also need to determine how to divide retirement plans and benefits. Generally, spouses are entitled to about half of the retirement benefits that their spouse earns during the marriage. Social Security benefits may also be affected by your divorce. If the marriage lasted ten years or more, and you are 62 or older, you will usually be able to collect 50% of benefits on your ex-spouse’s Social Security record. Collecting these benefits will not reduce your ex-spouse’s benefits. If your ex-spouse dies after at least ten years of marriage, you may be eligible for their full benefit amount provided you are at least 60 years old.
The older you are, the more likely it is that estate planning issues will affect your divorce. Late-life divorcing couples may want to include estate planning concerns in their divorce settlement. For example, some older divorcing couples will want to create trusts for shared children or agree to keep certain provisions in their will as part of the divorce agreement. A skilled divorce attorney can help you to understand your options. Divorcing couples will also want to take this opportunity to update their wills and anything that designates beneficiaries to make sure that the beneficiaries are who they want them to be.
Couples that divorce in late life will also want to think about life insurance and potentially including a life insurance policy as part of the divorce settlement. For example, if one party is paying the other spousal maintenance/alimony, and they die, the ex-spouse receiving those payments may be left destitute without life insurance. Some divorce agreements will include that one or both spouses need to maintain a life insurance policy of a certain amount with the other spouse named as the beneficiary. While maintenance/alimony is less favored by the court than it used to be, older couples may be more likely to have it as part of their agreement because it may be unreasonable to expect one of the parties to rejoin the workforce at their age.
Since spouses are eligible for certain benefits at specific ages, such as becoming eligible for reverse mortgages at age 62, you should consider these issues when timing your divorce. With Social Security, after 10 years of marriage you will have access to an ex-spouse’s benefits. Your divorce attorney can help you to determine what timing works best for you under the circumstances.