Three Things to Know if You are Considering a Divorce After 50

One of the most significant issues in a divorce later in life is the squeezed time frame to recover financially. A divorce means dividing assets with your spouse. Current market value is not the exclusive consideration of an asset. Some assets will become more valuable farther down the road.

Deciding who gets the house is a primary example. Age triggers eligibility for tax exemptions and waivers for real estate tax. A reverse mortgage, which can offer a potential stream of income, is an option beginning at age 62. Deductions for mortgage interest can be important in later years. Owning a house means access to equity if you choose to downsize.

Plans for retirement present another set of challenges that will require the careful attention of your attorney when the final divorce paperwork is being prepared. A separate court order, a Qualified Domestic Relations Order, may be necessary to cover the division of retirement benefits.

A small sample of the details your attorney should find the answers to are:

• whether you are eligible to receive distributions and still avoid tax penalties;
• whether you’re entitled to any contributions made to your spouse’s retirement plan(s) after the divorce; and
• whether you can get survivor benefits if your spouse dies after the divorce.

Social security comes into play as well and involves various factors: age, length of marriage, and number of years divorced, among others. These can all determine what you are entitled to as far as your spouse’s social security benefits. Social security benefits are not assets that a divorce court can divide, but you need to be aware of the regulations to maximize your post-divorce income.

Divorce is unpleasant at any age, but its effects may be more far-reaching later in life.