Gray divorce, the term describing couples over 50 years of age who wish to dissolve their marriage, is on the rise. In fact, the divorce rate for people over 50 doubled since 1990, and tripled for people over 65. While these couples typically do not need to address child related issues like child custody, they do face a much greater risk of drastic changes to their financial condition.
Protecting A Standard Of Living
People over 50 are much more likely to accumulate substantial wealth and create a substantial standard of living. As a result of their sizeable net worth, they may not see divorce as a threat to their standard of living. However, there are many reasons why this may not be true.
According to an article from The Washington Post, people over 50 do not have the time to rebuild financially that younger people have following a divorce. They also may have maxed out their earning potential and may not have the employment opportunities they had when they were younger. Additionally, they are at greater risk of health issues, which can take an enormous toll on finances. When all is said and done, they may find that their money does not go as far as they thought it would, and their standard of living is in jeopardy.
Consequently, people over 50 going through a divorce must be mindful to protect their assets, particularly 401(k)s, IRAs, pensions and other retirement accounts, which are subject to division like any other marital asset under Connecticut’s equitable distribution rules.
Further, people must use caution to see that assets such as these are divided properly, if they are to be divided. Transfers need to be handled correctly in order to avoid or minimize tax consequences. Qualified Domestic Relations Orders (QDRO) may need to be created.
A well-qualified attorney is an essential part of this process. There are many ways to divide property, and a sophisticated plan that considers tax and other consequences will yield results that are most likely to ensure that a standard of living is preserved even after property is split under Connecticut’s equitable distribution rules.
