Special Considerations In Gray Divorce

While the divorce rates overall are declining across the country, for older couples, say, in their 50’s and older, the rate has been steadily increasing in recent years.  In fact, the senior divorce rate has actually doubled since 1990.  And while the reasons for splitting are as varied as the couples themselves, the issues faced by these older couples who part ways are the same across the board. When it comes to dividing marital property, the stakes in gray divorce are significant.

What Constitutes Marital Property? 

For couples who have been married for decades, there are often numerous items that will have to be split up.  Marital property is anything that has been acquired, earned, or purchased over the course of the marriage.

What About Retirement Accounts? 

Even though 401(k)’s and IRA’s are held by a single person according to legal requirements, these accounts are owned by both parties if they’ve been accrued during the marriage.  When a couple divorces, one party may have to transfer some of the money into the other partner’s account as part of the overall divorce settlement.

401(k) rules:  When it comes to these accounts, a qualified domestic relations order (QDRO) has to be filed with the court indicating the financial division.  For tax purposes, this is best rolled over within 60 days of the order.  A portion of the money can be used immediately by the receiving party with no penalty even if they are under age 59 1/2, although state and federal taxes would still apply.

IRA rules:  A QDRO is not required for IRA’s, although funds can be rolled over only if called for in the divorce decree and filed with the custodian.

It’s Your Pension, Right? 

You put in the time to earn your pension, so it’s yours, right?!  Actually, no.  Pensions are another shared asset that is generally considered when dividing marital assets if they were accrued during the course of the marriage.

Good News: Social Security 

Perhaps the best news for couples who’ve been married for at least 10 years is that the less-earning spouse can earn up to 50 percent of their former spouse’s social security, with no penalty to the higher earning spouse, who can still collect their full social security benefit.

What About Money I Inherited? 

If you’ve been lucky enough to inherit a nest egg, it’s yours alone if it was left to you alone, UNLESS the money was put in joint accounts and shared equally during the marriage.  In that case, a judge may determine that it is marital property to be shared just like everything else.

Best Outcomes for You 

Going through a gray divorce can be challenging.  That’s why you need an experienced Baltimore family lawyer fighting for your interests.  At the Law Office of Hasson D. Barnes, we always put your goals as our top priority.  To discuss your situation, schedule a confidential consultation in our office today.