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Financial concerns for older people in a divorce

Older couples in Kentucky may be getting divorced at higher rates than in the past. According to Pew Research, the divorce rate nationwide for people older than 50 is twice as high as it was in the 1990s. Divorce among older couples can present a certain set of challenges even if both parties are striving for fairness.

One issue is that dividing the property that many couples have acquired by this stage of life can be complex. For example, there are a number of rules around dividing annuities, and they can lose value. Some couples opt instead for one person to take annuities while the other one takes an asset of equal value in order to avoid this situation.

Retirement accounts can also present complexities. For both pension plans and 401(k)s, a document known as a qualified domestic relations order is necessary. IRAs do not require this document, but there are certain rules that must be followed when dividing them. Pension plans also have rules associated with them. Both 401(k)s and IRAs can be rolled into new IRAs in order to avoid taxes and penalties. Some couples prefer a collaborative approach to divorce in order to try to work out these financial issues in a fair manner.

In a high-asset divorce, negotiating an agreement instead of going to court can give couples more control over the outcome of property division. Litigation is still an option if these negotiations break down. Before entering into negotiations, people may want to talk to an attorney about their financial goals and concerns. For example, the custodial parent may want to try to keep the house to avoid disrupting the children, but sometimes this can cause more financial hardship. Speaking with a lawyer about goals can also help keep a person focused during the stress of negotiations.

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Dietz & Overmann, PLLC
130 Dudley Road Suite 150
Edgewood, KY 41017

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