Divorce is something that many adults go through in their lifetimes. In fact 41 percent of first marriages end in divorce as well as 60 percent of second marriages, and 73 percent of third marriages. Many of these divorces occur before the age of 50. However, there has been an uptick in older Americans divorcing. Today, couples over the age of 50 account for 1 in 4 divorces. There are many reasons for the rise in older Americans divorcing. Longer lives, retirement, and no children at home lead many to consider divorce when they wouldn't have earlier in life. Here are three things to know about divorcing over the age of 50.
Division Of Retirement Assets Is Not Always 50/50
One of the biggest issues when it comes to divorcing over the age of 50 is figuring out what to do with retirement assets. A divorce attorney can help their client navigate through the various state laws that determine what they are entitled to. Dividing up a retirement account such as a 401(k) requires a court ordered qualified domestic relations order or QDRO. The judge or mediators working on the case will determine how the account is divided in terms of percentages.
Staying Insured Is Important
With age health begins to decline, which is why it is very important to have comprehensive health coverage after the age of 50. Divorce can make this very difficult. Those on their spouse's health coverage may find themselves scrambling to get a new plan. After a divorce, it's possible to continue using an ex spouse's existing coverage for up to 36 months through COBRA. There is also the possibility of purchasing a new private policy or through a state's healthcare exchange. Failure to purchase new insurance can lead to pricey medical care down the line so this is one thing to take care of immediately during a divorce.
Prepare For Major Financial Changes
One thing that anyone who is divorcing after the age of 50 should prepare for is major financial changes. Recovering financially is something that needs to be done quickly for older divorcees. Hiring a financial adviser may help couples make good financial decisions before, during, and after their divorce. Couples who are not yet divorced may want to consider decisions such as selling a home before the divorce takes place. For married couples the first $500,000 in capital gains from the sale of a home is exempt from federal taxation, that number is only $250,000 for a single person. Working with a divorce attorney and a financial adviser to come up with the best financial scenario for both parties is important.
Divorcing after 50 is becoming more common. However, there are a few things to consider. Dividing up retirement assets, keeping up with health insurance, and preparing for major financial changes are even more important for older divorcees.