About 25% of the people going through a divorce in the United States are over the age of 50. A number of factors explain this phenomenon. Divorce no longer holds the same stigma as it did in the past. Viagra provides more opportunities to men who in the past may have remained in a less than satisfactory marriage. The children are grown and out of the house. Women are more financially independent. People are living longer and are in better health. A regular comment is, “I may live another 5, 10, 20 years, and I do not want to live it married to him/her.” A healthy spouse may be less willing to act as a caretaker to an ill or disabled spouse. Second and third marriages, which make up about half of the divorces involving people over the age of 50, have a higher divorce rate than first marriages.
Divorce issues are different for divorcing spouses over the age of 50. Divorce over the age of 50 can reek financial upheaval. Your retirement assets may be gone or divided in half. You will have less time to recoup any such losses. Your high-earning years may be a thing of the past. As a result, it is important to consider the following points in any divorce action if you or your spouse are 50 or older:
- Consider carefully whether you want to be awarded the marital residence. Compare the cost of upkeep, taxes, mortgage payments, repairs, etc., versus the benefit of owning the home.
- Make sure you know what you actually owe in debts and other obligations. Obtain your credit report and your spouse’s credit report. Wisconsin is a community property state so you will probably be considered jointly liable for any credit card debts or loans. While your Marital Settlement Agreement may allocate debts to one party or another, that Marital Settlement Agreement is only between the spouses and is not binding on the creditor.
- Show any Marital Settlement Agreement to a tax accountant for review and analysis. Maintenance is income to the recipient and deductible to the payor. Know the impact of removing funds from any retirement account or IRA. Consider whether it is better to rent or own a residence.
- Remember to take into consideration the cost of health insurance.
- Make sure any pensions are fairly divided or that an equivalent asset is allocated to the other party. Get the pension valued so you know the present value of a monthly pension payment. You may be able to negotiate survivorship benefits of a pension. Because you are over the age of 50, your chances of building a pension or 401(k) in any other significant manner is substantially lessoned by time.
- Consider how divorce assets will be divided on death. You may wish to include in any Marital Settlement Agreement provisions for payment of educational expenses of children or grandchildren, allocation of other assets on death, etc. While the Court may not have jurisdiction to take these actions in a divorce, the parties can stipulate to these provisions. Make sure to draw up a will or trust to ensure that assets are correctly distributed to heirs.
- As soon as able, change beneficiary designations on life insurance policies, pensions, 401(k)s and other assets.
- Change, if necessary, any medical directives or powers of attorney. In most instances, you will not want your spouse to act in those capacities during the divorce process.
- If one party is disabled or in a nursing home, it is possible to craft a Marital Settlement Agreement accordingly. While there is a presumption of 50/50 division of marital assets, that presumption is rebuttable given the facts and circumstances of each case. If divestment is an issue in a nursing home case, that can be factored into any asset division by a capable Wisconsin divorce attorney knowledgeable in the area of estate planning and elder care.
- Consider negotiating provisions which provide ownership of life insurance on the other party. If a spouse is receiving maintenance and the paying spouse dies, the income can be continued through life insurance proceeds.
- Consider the timing of the divorce. Sometimes a day makes a difference. For example, in Social Security where there is a 10 year eligibility requirement when a former spouse is eligible to receive Social Security. Maintenance of health insurance may be a factor in some medical situations.
Divorce over the age of 50 is a unique circumstance requiring careful consideration and planning. For more information, call 1-800-805-1976 or email Attorney Linda S. Vanden Heuvel. Also, see Divorce in Wisconsin.