Late-Life Divorce Laws

The phrase “late-life divorce” refers to a divorce that occurs when the parties to the marriage are older in years (i.e., 50 or older).

What is Divorce?

Divorce is the legal process through which a marriage is brought to an end. The court will issue a formal judgment of divorce. The judgment of divorce officially dissolves the marriage for legal purposes. When a divorce is finalized, everyone is free to remarry. The document that declares the parties divorced is known as a divorce decree.

In obtaining a divorce, a party may request that the court grant spousal support, also known as alimony. In most states, a request for alimony is made as part of the divorce petition (the document requesting that the court grant a divorce).

What Do You Need to Consider Regarding Finances in a Late-Life Divorce?

Financial considerations may predominate in a later-life divorce to a greater extent than in an earlier-life one. For example, as the spouses become older, they get closer to retirement age, which gives rise to issues of benefits associated with older age (i.e., Social Security, pensions).

Specific financial issues prevalent in the late-life divorce context include:

• Disposition of Real and Personal Property: Older individuals, through time, acquire real property (i.e., houses) and personal property (i.e., automobiles, stocks, 401k benefits). As such, there are frequently more assets to distribute upon the divorce of an older couple than a younger one.
• Life Insurance Benefits: It is common for couples to have life insurance policies on each other’s lives. The spouses are named as the beneficiaries of the policies. This means that the surviving spouse will receive the money specified in the policy when the owner dies.
  • Typically, the divorcing spouses will no longer want their soon-to-be-ex to be the recipient of the insurance proceeds. The parties may, therefore, seek to change the beneficiaries of the policies.
  • Of note, however, if one party owes the other alimony, there will need to be an insurance policy in place so that on the death of the person who is required to pay alimony, the other spouse will be protected against the loss of what may be their primary source of income. In such cases, a judge will order the paying spouse to maintain an insurance policy on their life sufficient to cover the value of the alimony payments and to designate the ex-spouse as the policy’s sole beneficiary.
• Social Security Benefits: Individuals become eligible for social security benefits at age 62. When a later-life couple obtains a divorce, according to federal law, each party may still be entitled to receive benefits based on the former spouse’s work record. To qualify for this entitlement, the divorced spouse must be 62 or older and unmarried. The benefit to which the divorced spouse is entitled based on their own work must be less than the benefit the spouse would receive based on the former spouse’s work.
  • In other words, Spouse A can receive social security benefits based on their own work record and Spouse B’s work record, so long as the amount of Spouse A’s own benefit is less than they would have received from Spouse B’s benefit if they had stayed married. The overall goal is to make up the difference in social security benefits between what Spouse A receives post-divorce and what they would have received without divorce.
• Taxes Owed to the Internal Revenue Service (IRS): Spouses who file joint tax returns while married may owe unpaid or back taxes to the IRS when they divorce. Under the law, if you are divorced, you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce. In short, the IRS can require you to pay the whole bill even though it was created when you were still together.
• Pension Benefits: Generally, under state divorce laws, a pension earned during the years of a marriage is considered to be a jointly owned asset. This means the pension is considered the marital property of both spouses, not just one spouse. When divorce occurs, the pension must be divided between the spouses. Court orders that require a pension plan to make payments to a former spouse are known as domestic relations orders.

What is a Qualified Domestic Relations Order?

In a divorce setting, pension plans are sometimes included in the list of assets to be distributed to the parties. The parties’ divorce pension rights are listed in a court order known as a “Qualified Domestic Relations Order,” or QDRO. The parties’ pension plan administrator or coordinator will then be bound to follow the provisions outlined in the QDRO.

The qualified domestic relations order outlines the division of pension plans according to the divorce decree. QDROs can be prepared in several different ways, just as long as they conform to the requirements of state and federal laws, such as the Employment Retirement Income Security Act (ERISA).

A QDRO provides for an “alternate payee” (person to receive the retirement benefits), which may be a spouse, ex-spouse, child, or other dependent. To be valid, a QDRO must describe (among other things) the percentage of retirement plan monies going to the alternate payee and how that percentage is determined.

What Other Concerns Should You Keep in Mind for Late-Life Divorces?

Issues related to health care benefits and concerns (i.e., living wills, advanced health care directives) also become of greater importance when a couple seeking a divorce is older. Older persons may become physically or mentally incapacitated and lose the capability of making their own healthcare decisions.

Older persons need to designate someone to act on their behalf should they become incapacitated, deathly ill, or unable to make their own decisions due to a memory or cognitive disease such as Alzheimer’s.

A health care proxy (often referred to as a “living will”) is a document that specifies whether an individual wishes to continue end-of-life medical care in case that person becomes incapacitated. Commonly, a spouse will name their spouse to act as their “agent” or “health care proxy.” The agent or proxy carries out the person’s wishes respecting end-of-life care. If the parties divorce, the proxy may be changed to another individual.

Do I Need a Lawyer for Help with a Late-Life Divorce?

If you are considering obtaining a divorce in your later years, you may wish to hire a divorce lawyer for assistance. The divorce attorney can advise you of potential issues your age poses, including finances and health concerns.

The lawyer will represent you at any hearings before the court, and if your divorce ends up in a trial, the lawyer can represent you and ensure that your rights are respected. Perhaps most importantly, the lawyer will represent you in negotiations with your spouse to resolve financial and healthcare issues without asking the court to decide these questions.