Divorcing Later in Life: What You Need to Know

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Divorcing Later in Life: What You Need to Know

When divorcing later in life, there are important considerations that you need to know. You may need to think through very different issues for a divorce at a later age than you would for a divorce when younger. Crucial points include timing of the divorce, qualifying for public benefit programs, dealing with life insurance, and estate planning.

In Later Life, Does It Matter When You Divorce?

Yes, the timing of when you divorce could substantially affect your future. Your age and your spouse’s age could be large factors in determining the assets available to you. The assets available matter during divorce because you will need to go through the process of equitable distribution. This process involves dividing your marital assets between the two of you based on equitable factors. Marital assets can include benefits that one or both of you are receiving or plan to receive, such as retirement payments.

For example, Social Security benefits could be a factor in distributing your assets for the divorce. Spouses who are married for more than 10 years and are over age 62 may be eligible to collect partial Social Security benefits based on an ex-spouse’s work record. If you or your spouse need these benefits, you might want to schedule  the divorce to take benefits eligibility into account. You can and should discuss issues such as the right time  to divorce with your divorce lawyer.

How Public Benefits Programs Could Matter Late in Life

Moreover, public benefits programs beyond Social Security could affect your divorce. Many older people in the United States depend on public benefits programs such as Medicaid. These programs often have income or savings limitations that affect the benefits you could receive. For example, having liquid cash may restrict you from receiving certain benefits. But having equity in a house may not matter under a benefit program’s rules.

As a result, you will need to pay attention to benefits program eligibility when dividing assets. You or your spouse may want to keep the house in order to qualify for Medicaid or other programs. You may need to consider the amount of liquid assets you will receive in the divorce, since it might disqualify you for benefits or make it harder to get them. Bring up any current or future benefits that you receive to your lawyer as you begin discussing divorce.

Could Life Insurance Affect Your Divorce Too?

Having or not having life insurance might matter in your divorce. Again, your marital property will get divided up during divorce, whether by your agreement or by a judge’s decision. You or your spouse may pay for life insurance that lists the other spouse as the beneficiary. During the divorce, you may need to agree what to do with that policy (depending on the type of policy, some will be considered marital property). Allowing the policy to lapse would cause the policyholder to lose the payments he or she has made over time. But changing the beneficiary could deprive the other spouse of an expected benefit. Especially if the other spouse has not been working in reliance on the policyholder’s income, this could create a lot of difficulties.

Here’s one way to handle it (if the policyholder is going to pay alimony): the policyholder might agree to keep making payments with the understanding that the other spouse will remain the beneficiary. This could keep the other spouse from financial ruin should the policyholder die and stop paying alimony. To take this step, you should have a formal written agreement about the policy prepared as part of your divorce. No matter how you decide to handle life insurance in your property distribution, it’s important to take it into account.

Estate Planning and Divorce Later in Life

Finally, thinking about divorce later in life is also a great time to think about estate planning. Your divorce can cause major changes in who you want or plan to inherit your estate. You may want to remove your ex-spouse from your will or adjust beneficiaries to your trust. In addition, divorce and its accompanying distribution of marital assets may change the contents of your estate. You might need to change your retirement plan or adjust investments to account for the divorce. QDROs or new payments such as alimony could become a factor in your planning. If you have questions about your estate planning as it relates to divorce, talk to your divorce lawyer and consult a qualified estate planning attorney.

Divorcing Later in Life? Call New Direction Family Law

Are you considering a divorce later in your life or after a long marriage? If you need legal advice, the team at New Direction Family Law is available today to review your case. Our decades of combined legal experience help us knowledgeably, effectively, and compassionately handle your divorce. We will work hard toward your best outcome and also help you understand your legal rights. Contact our New Direction Family Law professionals at (919) 646-6561 to schedule a consultation, or visit us at our website.

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