Issues facing divorcing couples after 50

Arkansas residents who get divorced after the age of 50 should pay special attention to certain issues.

Anyone in Arkansas who has experienced a divorce knows that it is never easy. The loss of an expected life together and associated dreams accompanies the tangible losses of belongings and everyday routines. Some of these losses are unavoidable but some can be minimized by making wise decisions during the divorce settlement process.

Following are some of the issues that face people who get divorced as they near the age of retirement.

Whether or not to keep the house

As noted by NextAvenue.com, women especially tend to feel an emotional tug and desire to keep a marital home after a divorce. The security that this can bring is understandable but it may not be the best financial decision. The Huffington Post points out that the many costs associated with a home can make keeping it a rather bad decision in fact.

Spouses are encouraged to consider all of the following when making this choice:

  • The current market value and how much is still owed on the home.
  • The current mortgage interest rate.
  • The spouse's ability to refinance alone if desired.
  • Ongoing maintenance costs including both regular upkeep and unplanned repair needs.
  • Property tax costs which are subject to fluctuation.

Additionally, if a spouse wishes to sell the home down the road, the potential to pay high capital gains tax could reduce the overall benefit.

Whether or not to split a retirement account

It is relatively common for spouses to split retirement assets in a divorce these days. However, it is not always the best choice. Remember that many retirement accounts are funded with pre-tax dollars. This means that the ultimate owner of these assets will pay taxes in the future. Exceptions do exist for accounts such as Roth IRAs.

If the choice to split an account is made, it is important that a Qualified Domestic Relations Order is utilized. This legal process ensures that any early withdrawal fees or penalties are avoided and thereby maintains the maximum asset value for the spouses.

Access to health insurance and social security benefits

Some people may find that obtaining private health insurance in their mid to late 50s is very expensive. Make a point to understand these costs and factor them in to any divorce settlement appropriately.

Additionally, if a marriage lasted at least 10 years, one spouse can receive a separate allotment of their former spouse's social security benefits as long as no subsequent remarriage has taken place. This allotment of approximately 50 percent does not come out of the spouse's original share.

Recommendations for divorcing couples

People who are getting divorced in Arkansas should always obtain help from a lawyer. There are many areas in which the right professional guidance can save valuable money and prevent unnecessary loss.

Keywords: divorce, retirement, gray divorce, assets, property