Differences in Divorce Between Seniors
Many people have heard the statistic that in the United States, one in every two married couples will eventually get divorced. Contrary to the popular belief that millennials have the highest divorce rates, the root of the increase in divorce rates comes from the baby boomer generation as they reach retiring age.
“Silver divorces”—or divorces between individuals from around the retirement age—have a unique set of advantages and challenges that differ from divorces between younger couples. While child custody and support are likely not a concern for silver divorces, as children are usually grown and financially independent by this time, there are still financial and emotional concerns caused by asset division between splitting senior couples.
By the time couples reach retirement age, they have generally acquired a substantial amount of wealth and assets; often the most prominent of these is the home that they share. During a divorce, state law usually attempts to divvy assets in a way that is fair, equitable, and a close to an even split between two former spouses. However, this becomes slightly complicated during the division of a 401(k) or IRA for senior couples. This is because while each individual retiree’s income will likely stay the same after a divorce, each spouse will see higher retirement costs. Couples in the midst of a silver divorce are generally retired, or about to retire, and therefore have limited means of obtaining income. Researchers say in cases where dividing a home and 401(k) is not the best solution, a good way to combat this is entering into a reverse mortgage. In a reverse mortgage—reserved for those aged 62 and older—one spouse could receive the home and start a system where they pay income as long as they live in the home, while the other spouse can take the 401(k) account or IRA. Reverse mortgages do not require monthly payments and payments are only due when the last homeowner leaves the house.
The intricacies of divorce law can be a complex landscape. At Law Office of Andrew A. Bestafka, Esq., the adept divorce attorney can help guide you through this process and seek the best possible outcome for your impending divorce. Contact us at (732) 898-2378 to learn more.