The phrase “late-life divorce” refers to a divorce that occurs when the parties to the marriage are older in years (i.e., 50 or older).
What is Divorce?
Divorce is a legal process through which the spouses to a marriage obtain a formal judgment of divorce. The judgment of divorce officially dissolves the marriage for legal purposes. When a divorce is finalized, each person is then free to remarry if they choose.
The document that declares the parties divorced is known as a divorce decree. A party may request that the court grant spousal support, also known as alimony. In most states is made as part of the petition for divorce – the document requesting that the court grant a divorce.
What Do You Need to Consider for a Late-Life Divorces?
Financial considerations may predominate in a later-life divorce to a greater extent than in an earlier-life one. As spouses become older, they get closer to retirement age, which means issues of employment benefits associated with older age (i.e., Social Security, pensions) come to the fore.
Issues related to health care benefits and concerns (i.e.,living wills, advanced health care directives) also become of greater importance when a couple seeking a divorce is older.
Specific financial issues prevalent in the late-life divorce context include:
- Disposition of Real and Personal Property: Older individuals, through time, acquire real property (i.e., houses) and personal property (i.e., automobiles, stocks, 401k benefits). As such, there are frequently more assets to distribute upon divorce of an older couple.
- Life Insurance Benefits: An older individual owning a policy of life insurance often names their spouse as the beneficiary of the proceeds of the policy. This means that when the owner dies, the surviving spouse receives a sum of money specified in the policy.
- In many instances, a party to a later-life divorce will not want the soon-to-be former spouse obtaining these proceeds. That party may therefore seek to re-designate the beneficiary to another person. This changing of the beneficiary can be accomplished if the insurance policy is revocable; that is, if it allows for revocable beneficiaries.
- Other policies may provide that the policy owner may not change the beneficiary once that person has been designated. This type of beneficiary is known as an irrevocable beneficiary.
- Social Security Benefits: Individuals become partially eligible for receipt of social security benefits at age 62. If a later-life couple obtains a divorce, one party may still be entitled to receive benefits on the former spouse’s work record.
- To qualify for this entitlement, the divorced spouse must be 62 or older unmarried; the ex-spouse must be entitled to social security retirement benefits; and the benefit to which the divorced spouse is entitled based on their own work must be less than the amount of the benefit that spouse would receive based on the former spouse’s work.
- Taxes Owed to the Internal Revenue Service (IRS): Spouses who filed joint tax returns while married may owe unpaid or back taxes to the IRS when they divorce. Under the law, if you are divorced, then you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce.
- Pension Benefits: Generally, under state divorce laws, a pension earned during the length of a marriage is considered to be a jointly owned asset. This means that the pension is considered to be marital property of both spouses, not just of one spouse. When divorce occurs, the pension is therefore usually divided between spouses. Court orders that require a pension plan to make payments to a former spouse are known as domestic relations orders.
What is a Qualified Domestic Relations Order?
A Qualified Domestic Relations Order, is a specific type of domestic relations order. This type of order is for domestic relations orders that are ERISA-qualified retirement plans. A QDRO provides for an “alternate payee” (person to receive the retirement benefits), which may be a spouse, ex-spouse, child, or other dependent. To be valid, a QDRO must describe (among other things) the percentage of retirement plan monies going to the alternate payee, as well as how that percentage is determined.
What Other Concerns Should You Keep in Mind for Late-Life Divorces?
Other common late-life divorce concerns relate to spousal health.the health of the spouses. Older persons may become incapacitated, and lose the capability of making their own health care decisions.
A health care proxy (often referred to as a “living will”) is a document that specifies whether an individual wishes to continue end-of-life medical care, in case that person becomes incapacitated.
Commonly, a spouse will name their married spouse as to act as their “agent” or “health care proxy.” The agent or proxy carries out the person’s wishes respecting end-of life care. If the parties divorce, the proxy may need to be changed to another individual.
Do I Need a Lawyer for Help with a Late-Life Divorce?
If you are considering obtaining a divorce in your later years, you may wish to hire a divorce attorney for assistance. The divorce attorney can advise you as to potential issues posed by your or your spouse’s health or retirement. This lawyer can also represent you in court.