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Gray Divorce and Retirement

Barron’s recently reported on a number of critical issues for older adults who are going through a divorce.

An Analysis by the Pew Research Center found the rate of divorce among Americans over the age of 50 has more than doubled since 1990. Empty nesting does not always lead to the Golden Years, as couples who have raised children decide to seek out life in a new direction.

Our East Brunswick divorce lawyers recently wrote about Common Causes of Couples Quitting.

But your reasons for divorce are largely personal. While fault-based grounds for divorce exist under New Jersey law (N.J.S.2A:34-2), New Jersey is considered a no-fault state, with the vast majority of divorces filed on the grounds of “irreconcilable differences.”

Legal Help for Older Divorce

When combined with America’s retirement-savings crisis, a poorly handled divorce in later life can lead to economically disaster for one or both spouses. But our divorce lawyers in East Brunswick know that doesn’t need to be the case.

Divorcing later in life has advantages. Usually the children are grown or nearly grown and custody and/or child support are lesser issues. Couples have often accumulated substantial wealth in both home value and retirement accounts. But they are also closer to the end of their working lives, with less time for economic recovery.

Even when a couple can divorce amicably, divorce is a complicated legal process. Tax implications can be particularly ruinous if handled inappropriately. Seeking guidance from an experienced family law firm in New Jersey can save both money and heartache in the long run.

Issues for Divorce over 50 in New Jersey

Pension benefits and the value of IRAs, 401Ks and other self-funded retirement accounts are the assets meant to see older working adults through their retirement years. Disbursement can have major tax implications, while ensuring access is vital to the financial future of both parties.

It’s a Catch-22 the law has means to address via a qualified domestic relations order (QDRO).

A QDRO gives a person rights to a portion of an ex-spouse’s retirement benefits. It is separate from a divorce judgment in that it legally stands alone. Once signed by a judge and submitted to the plan administrator, a spouse will be paid directly from the fund. Whereas, noncompliance with most elements of a divorce judgment would require a return to court.

Other divorce issues for older couples:

Alimony: We have written extensively about tax changes to alimony. But tax implications aside, alimony is among the most complex and subjective elements of many divorces. Visit our alimony in New Jersey page for more information.

Social Security: Government benefits are also of significance among divorcing older adults. When it comes to Social Security benefits, spouses married longer than 10 years who don’t remarry are generally entitled to half an ex-spouse’s benefits at normal retirement age.

Insurance: Maintaining health insurance is critical for older adults. If you cannot obtain benefits through your employer, you should price health insurance policies through a health care exchange. Affording coverage can be a major piece of the financial picture that must be taken into account early in the process.

Estate planning: A proper divorce shares many elements with careful estate planning. From updating policy beneficiaries and next-of-kin, to transferring real estate and establishing a trust, consulting an experienced family law firm with significant estate-planning experience can allow much of this paperwork to be completed as part of the divorce process.

It’s not that divorcing later in life is more risky, it’s that the consequences of mistakes are more costly. Seeking qualified legal guidance offers the best chance of success.

Call Rozin|Golinder Law, LLC today for a free and confidential consultation.

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