When you get divorced at a young age, you have years ahead of you in which to adjust. You might go back to school and launch a second career, or remarry and start a new family.

But, when you divorce at age 50 or beyond, the future holds far fewer options. Baby-boomers are nearing or already at retirement. Even without the additional stress of divorce, they face issues younger spouses haven’t even begun to think about.

Handling these challenges alone—and with significantly less wealth than you had anticipated—can be daunting.  Late-life divorce is a step that needs to be carefully planned. A hasty move without expert assistance could affect how you live out the rest of your life.

But, you may not need to give up as much as you fear you will. With the guidance of an attorney experienced in business and finance as well as family law, you can salvage a good deal of what you’ve worked for all this time.

Baby-Boomer Divorce: Important Considerations for Older Divorcing Couples

Making sure you have the resources to care for yourself in your remaining years may be the most pressing issue of your divorce. You and your spouse have spent a good deal of your adult lives accumulating assets and amassing whatever wealth you now have at your disposal. You had planned to rely on these assets to support a shared retirement. Now, these same assets must be divided between you.

As you well know, two people living apart cannot live as cheaply as they can as a couple. Add to that the reduced income, increased medical expenses, and unforeseen setbacks that can occur as we age and you will see that this is a decision that must be undertaken with care.

Every aspect of your financial situation, future prospects, and the state of your and your spouse’s health will need to be addressed in fashioning an agreement regarding property distribution and support. Remember, you are well-advised to attempt to reach an agreement with your spouse rather than leaving the distribution of your property to the court. Your attorneys will hash out matters peculiar to your situation that a court may not address.

The following are some of the issues your attorneys are likely to discuss in negotiating your property settlement and support agreements.

Retirement plans: A retirement fund may be your most significant asset, of even greater value than your house.  Accurate valuation of your assets, including a retirement fund, is crucial to the fair distribution of your property.

The division of retirement benefits as part of an equitable distribution can be a complicated process, and may require a separate order (called a Qualified Domestic Relations Order) in addition to the order related to property distribution in general. You will need to obtain a copy of the Summary Plan Description from your retirement-plan administrator to determine the terms of your particular plan.

Divorcing couples often fail to realize that the full amount of a retirement account will not be available for distribution. The division of the fund in a property distribution will qualify as a withdrawal, resulting in a tax assessment amounting to roughly 35% of the fund’s value.

Additional issues that might be considered in relation to a retirement plan include:

• the timing of distributions in order to avoid certain tax penalties,
• the availability of survivor benefits if your spouse dies after you divorce,
• whether your spouse has borrowed against a 401(k) plan and needs to repay the loan before funds are divided,
• whether you are entitled to contributions made after the divorce,
• whether you are entitled to a hardship withdrawal if the need should arise, and
• whether your rights are protected under the military’s Survivor Benefit Plan.

Social Security benefits: Social Security benefits are routinely undervalued by spouses who go through a divorce without assistance. For instance, parties often fail to account for the availability of a higher-earning spouse’s social security benefits.

The following are just a few of the social-security-related benefits to which you may be entitled:

• Even after your divorce, if you are age 62 or older and your marriage lasted 10 or more years, you are entitled to collect retirement benefits on your former spouse’s Social Security record, without reducing his or her benefits.
•  You may be eligible to draw benefits of up to 50% of your former spouse’s benefits.
•  You may begin to collect Social Security benefits at age 62 on either your own Social Security record or your former spouse’s. When you reach full retirement age (which is determined by your date of birth), you may switch to the other benefit, if that benefit is higher.
•  After you have been divorced for two or more years, you will be entitled to benefits through your former spouse, even if he is not yet collecting the benefits for which he is eligible.
•  If your former spouse dies, you may be eligible to receive survivor benefits equal to 100% of his or her Social Security benefit if: (1) your marriage lasted at least 10 years; (2) you are at least 60 years of age; and (3) you are not entitled to retirement benefits equal to or greater than the benefits of your former spouse.

Your family home: Your house is a marital asset subject to division upon divorce. Couples may choose to sell and divide the proceeds or one spouse may elect to continue living in the house. In this case, the spouse who does not remain in the house will receive other assets to compensate for his or her portion of the house’s value.

But, the market value of this particular asset may not be the only consideration in determining its value to you. You may have lived in the house for decades and have family and friends nearby. Familiar surroundings may afford some comfort, especially when nearly everything else in your life is changing. You will want to discuss these issues with your attorney when you are negotiating your property distribution agreement.

There may be additional reasons for keeping your house that go beyond the sentimental:

•  You may be eligible for property tax exemptions and waivers after you reach a certain age.
•  At the age of 62, you will be eligible for a reverse mortgage, which offers a potential stream of income.
• When you qualify for Medicaid, for instance, you may be eligible for favorable tax treatment related to your primary residence.
• When your income goes down in later years, deductions for mortgage interest and taxes and exclusions from gains upon sale will be a welcome benefit.
• The option of renting a portion of your house may be another source of income if and when the need arises.
• If it becomes necessary to move into smaller and more manageable quarters, the equity in your house may enable you to do so without giving up additional assets.

Alimony: Though you may be entitled to alimony upon your divorce, you are well-advised not to rely on it as your means of future support. If your spouse is still employed, he or she will likely retire in the not-too-distant future and the current source of income will come to an end.

Even before that occurs, your ex-spouse may die, or become ill or disabled and lose the wherewithal to continue the payments. An illness or disability may not only curtail his income but deplete his assets, so that there is nothing left with which to satisfy the obligation to you.

At this stage of your life, assuring your future income through a well-conceived asset distribution rather than alimony is the wisest and safest course. Your attorney will take this into consideration in negotiating your property distribution agreement.

If your assets cannot adequately provide for your needs and alimony is required, your attorney may request your former spouse to take out life and/or disability insurance, designating you as the beneficiary. This can assure a source of income if your ex-spouse becomes disabled or dies and the alimony can no longer be paid.

Health insurance: Once your divorce is final, you will no longer be entitled to health insurance through your spouse’s employer. This is particularly troublesome for older adults, whose likelihood of requiring medical treatment will only increase with time. Your attorney can address the payment of your health insurance premiums and medical bills in a property and support agreement.

Protecting Your Future

Property distribution is not the only matter your attorney and other advisers can help you with. Devising an after-divorce financial plan and budget with the help of a professional planner can be particularly important for couples in their fifties and beyond. Include in your plan issues such as the need to reduce expenditures, putting aside funds for contingencies, determining when you can afford to retire, your ability to revise an existing retirement plan, the option to draw from retirement and other funds and the tax consequences of doing so.

You will want to establish your own credit if your spouse was the sole earner and the bills were paid in his name. You might also ask your attorney what can be done to protect you from liability for the debts of your spouse.

 A seasoned divorce attorney will consult with or refer you to advisors qualified in every aspect of your divorce. Reliance on such professionals is highly recommended for mature couples with substantial and complex assets.