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Financial Concerns When Going Through a Gray Divorce

Posted on in Division of Assets

Financial Concerns When Going Through a Gray DivorceGray divorce, which refers to divorcees who are older than 50, has a different focus during negotiations than a younger divorce. The children in a gray divorce are likely no longer dependents or close to that age, which means that the allocation of parental responsibilities and child support may not even be an issue. However, the financial aspects of the divorce may be more complicated because of the duration of the marriage and divorcees’ stage in their lives. Financial viability after a gray divorce is more important than normal because the divorcees will have fewer opportunities to make up for lost assets.

Marital Properties

Gray divorcees have often collected numerous and valuable properties during their marriage, which they now must divide. The most valuable and vital properties for gray divorcees may be their retirement plans because it is the money they are counting on to support them for the rest of their lives. Most retirement plans are considered marital properties, including:

  • 401(k) plans;
  • 403(b) plans;
  • IRA accounts; and
  • Government or private pension plans.

Divorcees can either share their retirement benefits or give their spouse other properties of equal value. Dividing a retirement plan may require filing official documents, such as a Qualified Domestic Relations Order. The exception amongst retirement benefits is Social Security. An eligible retiree can receive Social Security payments that equal a certain percentage of his or her former spouse’s benefits without it affecting what the former spouse receives.

Spousal Maintenance

The duration of a marriage determines the duration of spousal maintenance payments after a divorce. According to Illinois law, spousal maintenance payments can continue indefinitely if the spouses were married for at least 20 years. Gray divorcees often reach this benchmark. A gray divorcee who was financially dependent upon his or her spouse during their marriage is unlikely to become self-supporting because the chance of advancing in his or her career is limited.

Your Decisions

Gray divorce is the only age category that has increased in recent years. When going through a gray divorce, you have important questions to answer, such as:

  • What is the accurate value of your retirement benefits?;
  • How much money will you need to sustain yourself during your retirement years?;
  • Will you need to put off your retirement?;
  • Will you need to adjust your expected standard of living during retirement?;
  • Do you want to divide your retirement benefits or keep them intact?; and
  • If you keep them intact, what other properties are you willing to give up?

A DuPage County divorce attorney at Calabrese Associates, P.C., can help you determine what you need from your divorce to meet your retirement goals. To schedule a consultation, call 630-393-3111.

Source:

https://www.kiplinger.com/article/retirement/T065-C000-S004-dividing-your-assets-in-a-gray-divorce.html

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