Divorcing later in life is a growing trend in Texas. As couples seek to part ways, they need to be aware of the additional layers of complexities they face.
A younger couple may only have to divide up a house, some savings accounts and the beginnings of a retirement plan or investment portfolio (with years to make a financial recovery). Older couples no longer have the luxury of time as they get closer to retirement. How their property is divided will have a profound impact on when they can retire and the lifestyle they will enjoy during those years.
At our law offices, we understand the risks associated with property division later in life. Attorney Mary Quinn is equipped with decades of experience dividing community property in Texas. She works with skilled financial professionals to produce and proposal for division that protects the long-term financial needs of her clients.
Having a house and other real estate — Owning a home plays a much different role in older divorces than in younger divorces. While a spouse may want it as a place to live after the divorce or for the equity (or opportunity for reverse mortgage), there are additional considerations of how the value of the house could affect spend-downs for Medicare later.
Retirement plans, including 401(k)s and IRAs — You will likely need a qualified domestic relations order (QDRO) to divide the retirement plan and benefits. Work through a lawyer to make this division. Mistakes or being talked into something by your spouse could result in far fewer distributions and tax penalties. Also, make sure you are aware of any loans your spouse may have taken out against the plan, which should be repaid before the plan is divided.
Investment portfolios — Our firm works with financial professionals to skillfully evaluate the portfolio, and how it has been built and balanced over the years. A hasty division can cost both individuals a huge percentage of the worth of the portfolio by disrupting its diversification and risk profile at a time when the couple is getting closer to retirement and cannot afford to be exposed to that kind of risk.
Social Security — The value of Social Security is not generally included in the division of property. However, if the marriage lasted more than 10 years, and you are more than 62 years old, you will likely be able to draw up to 50 percent of your ex-spouse’s retirement benefit under Social Security. You may also be eligible to recover the survivor benefits on your ex-spouse’s Social Security, if your spouse passes away.