Older generations often describe younger people as impulsive, self-interested and less likely to commit to a long-term relationship. Even if that is true, recent data shows a rise in divorce rates among those older than age 50. People in that demographic may have a multitude of understandable reasons to end their marriage, but there is a key difference.
If you are over the age of 50 and thinking of divorcing here in Texas, you may want to consider just what the impact will be to your finances. Older people generally have been married for a longer period of time and thus have more assets to divide in a divorce agreement. Experts say that there are certain factors you’ll want to keep in mind as you go through the process of divorce. This way, you’ll be better prepared for potential financial impacts.
Plan for lifetime expenses
When an older person gets a divorce, it doesn’t mean he or she doesn’t have plenty of life left to live. One recent statistic found that people aged 65 could expect to live almost 20 additional years. They need to think of what kind of expenses they may need for the rest of their life. If they happen to divorce, they will likely divide their assets between themselves and their ex-spouse. That leaves the person with less money for not just living expenses but potential medical costs.
Medical and day-to-day finances aren’t the only consideration. Certain tax laws may greatly affect each person’s future finances. Some people may pay their ex directly from a retirement account, but both a 401(k) and IRA payout may incur taxes and penalties. It is a better idea to get a qualified domestic relations order for your 401(k) and to list an IRA trustee-to-trustee payment explicitly in your divorce decree.
What if you get married again?
It isn’t uncommon for people this age to remarry. However, if they do so and subsequently divorce again, that could mean an even more significant impact on the person’s finances. Even if that marriage continues for the rest of the person’s life, his or her assets may end up with the other spouse’s children from a different relationship other than their own. The best way to avoid all of that is to get a prenuptial agreement that outlines exactly how to handle finances in the event of divorce or death.
No matter what the future may hold for you, divorce doesn’t have to destroy your finances. Working with a divorce and family law attorney can give you the confidence to work through your divorce proceedings and feel good about the future. It is yours to make, no matter your age.
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Author: On behalf of Katie L. Lewis of Katie L. Lewis, P.C. Family Law