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Divorce After 50: Property Division and Your Retirement

Divorce After 50: Property Division and Your Retirement

Posted By Meyers Law Group, P.C. || 27-Feb-2014

The rate of divorce after 50 (or "gray divorces") has remained high, meaning that more and more couples are now facing the numerous concerns that are unique to this type of divorce. While property division can be a complex and contentious issue in any divorce, these can become even weightier concerns in a late-life divorce. This is because of the proximity of retirement, how the results of your divorce could force you to push back those retirement plans. Problems could start with negotiating the future of your house.

Should you keep your house or not?

Whenever a house is involved in a divorce, each spouse has to assess whether it would be smarter to take additional liquid assets instead of keeping a house that would have to be maintained on just one income. But then there is the emotional value of the home, as well as the value of your house's equity. In a mid-life divorce, there are additional, pressing factors to consider:

  • Starting at 62, homeowners can get a reverse mortgage, which could provide them with substantial income
  • Being a homeowner makes it possible to collect income from renting space out
  • Later in life, the tax benefits of owning a house can be that much more valuable
  • Exemptions and waivers for real estate property become available after a certain age
  • With public benefits such as Medicaid, one's primary residence gets treated differently than other assets when it comes to eligibility

Dividing Retirement Plans in a Divorce

Again, this matter can still figure into any divorce, but when a couple divorces at the cusp of retirement, the importance of these issues can increase exponentially. It is vital that you review you and your spouse's retirement plans so you can understand the policies as well as the funds that are at stake. In order to divide a retirement or pension plan, you will probably need a Qualified Domestic Relations Order (QDRO), a court order that is distinct from any property division orders. Before you figure out what you want from this division, be sure to consult an attorney about any of the following issues that are pertinent to your case:

  • The possibility of taking a hardship withdrawal if necessary
  • Timing distributions so that you do not get hit with a tax penalty
  • Whether there are loans taken against a 401(k) plan that have to be paid off first
  • Can you collect a portion of the funds that get put into an account post-divorce?
  • Would you still have rights under the Survivor Benefit Plan available to spouses of military members?

Legal Assistance for Complex Issues in a Long Island Divorce

If you are considering a divorce and want to know how you could prepare for this process, or what it would entail, do not hesitate to contact the Meyers Law Group, P.C. If you are ready to file divorce papers and need an experienced divorce lawyer in Long Island, you can find the skilled representation and counsel you deserve at our firm. Do not wait to reach us today!