What Do You Need To Know When Divorcing After Age 50?

What Do You Need To Know When Divorcing After Age 50?

Divorces among those 50 and older (gray divorces) have doubled in the past 20 years. We’re healthier and living longer and people don’t want to spend their senior years in an unhappy relationship. While there is a lot of living to do after 50, couples who divorce in their 50s and 60s face unique financial challenges. There is less time to regain footing when there are financial missteps. And, even when the divorce is amicable, each party needs legal representation and financial consultants to ensure they are looking realistically at their situation and have the financial security they need.

Unique Issues When Divorcing After Age 50

1. Retirement: Even if couples were on track for retirement and they split their savings in the divorce, the amount often comes up short for each partner living separately. Whether you like it or not, each party has to now run their own household completely on their own in terms of monthly rent, mortgage, utilities, car payments and the like. The planned timing and lifestyle for retirement often needs to be adjusted downward. Lifestyles enjoyed prior to the split are not likely to be replicated in a post-divorce world.

2. Debt: Be aware that debts obtained jointly in a marriage remain the obligation of both parties after a divorce, even if a divorce decree suggests otherwise. If one party does not honor debts, the other may be liable. It is a good idea to monitor these accounts so that you know if your former spouse is keeping up with payments. Ideally with respect to mortgages on real property, one party or the other will refinance into their own name at the time the marriage ends or within a certain time period thereafter.

3. Employment: Earning potential can be limited for those 50+ re-entering the job market. It can be difficult for those who have retired, or have been out of the job market, to find gainful employment and it may be lower pay than you thought. Set realistic expectations.

4. Healthcare: Medical coverage is extremely important in our later years. It’s a time when personal medical needs often grow, sometimes suddenly. While COBRA insurance from one spouse’s employer may be available to the ex-spouse for 36 months after a divorce, it can be exceptionally expensive. It’s an important time to understand the costs of an individual health care policy and it may be wise to set one up as soon as possible after divorce or even while the case is still pending. Our Scottsdale law firm can aid you effectuating this transition as smoothly as possible.

5. The House: Frequently one spouse wants to keep the marital home after the divorce. But expenses go beyond the monthly mortgage payment. Maintenance, repairs, taxes and insurance must be considered and can be the difference between a comfortable lifestyle or being “house poor” or even bankruptcy. It’s important to put realities over emotion when it comes to the marital home. Often both parties are better suited to sell the marital home for cash, divide the proceeds, and restart a new life by leasing a smaller and more efficient home or apartment for the first years after the divorce is final.

6. Joint accounts: It’s important to consider all joint accounts and close them or at minimum change the named beneficiary on each account. You may also want to monitor your credit for unauthorized activity. Ideally, life insurance policies should be changed while the divorce is still pending.

7. Assets: Arizona is a community property state, requiring most property (other than specific exemptions) you and your spouse acquired during the marriage belongs equally to both parties. Community property can include real property, personal property, money, stocks, bonds and interest in an employer sponsored profit sharing or pension plan or individual retirement plan. Our law firm is experienced with these community property issues.