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What Divorcing Couples Over 50 Should Keep In Mind
Gray divorce is the term used to identify a divorce involving spouses at least 50 years of age. The number of people getting divorced at later stages of life has increased and today represents as many as one-fourth of all divorces in the United States. That is the statistic provided by the National Center for Family and Marriage at Bowling Green State University.
Couples in Massachusetts who are in their 50s and considering a divorce will learn quickly that they face issues unique to their phase of life. Special care is required when determining a property division settlement in these divorces.
The house may not be the best asset to keep
For many married couples, their home is the single most valuable asset they own. That, however, does not necessarily make it the most important asset to retain after a divorce. A publication by NextAvenue.com notes that it is common for women to seek ownership of the family home during a divorce largely for emotional reasons.
However, the Huffington Post highlights that making such important decisions based upon emotions can be very unwise. When selecting assets to split, husbands and wives should assess things from a financial perspective, not an emotional one. Homes can cost a lot of money over the course of years.
Some of the costs can be predicted to a certain level but many are unable to be known ahead of time. Even those costs that are known today are subject to change such as utility rates, property taxes and more. There is also the potential for capital gain taxes to be assessed when a home is eventually sold.
If keeping a home is a consideration, the spouse wanting the home should determine the potential for obtaining a solo mortgage or refinance on the home as well as estimating future expenses.
Retirement accounts require special handling
If spouses choose to split a retirement account, this should always be done with the use of a Qualified Domestic Relations Order. This legal document ensures that the movement of money from the fund to its ultimate destination is clearly known to be part of a divorce decree. Without a QDRO, the Internal Revenue Service can assess taxes on the money taken from the account. This can happen when any distribution does not meet the retirement requirements. Many early withdrawal fees can also be assessed.
The bigger picture
With fewer years to work before retirement than their younger counterparts, people in Massachusetts who are over 50 must be very careful to guard their financial futures when getting divorced. This can also include factoring in social security benefits and even the cost of health insurance.
Working with an experienced attorney during the process is always recommended as a way of avoiding unnecessary loss.
Keywords: divorce, gray divorce, retirement, assets, property, division