Estate Plans Might Be Impacted by Later-in-Life Divorces
In the case of a divorce later in life, such as among individuals who are 50 years old or more, there may no longer be issues of child support or custody to worry about. Nevertheless, when approaching the property division of a marital estate that has accumulated assets and debts over many years, chances are that good strategy will be required.
For example, no one wants their divorce to drag on in disputes, yet a couple might not agree on their respective marital estate valuations and/or the allocation of assets and debts to each soon-to-be former spouse. Since New Jersey courts do not require an exact 50/50 split of marital property, reaching agreement about what constitutes an equitable distribution of property may be difficult. Not surprisingly, divorce courts may examine multiple factors in making decisions about property division.
One issue affecting many later-in-life divorces is updating retirement accounts to reflect the intended beneficiaries, powers of attorney and/or trustees. For example, an attorney might suggest arranging for an independent trustee, rather than having in-laws named as trustees. Assumptions about adult children serving as powers of attorney may also need to be revisited.
An attorney might also offer counseling about how retirement benefits will affect older Americans after a divorce. In the case of individuals who are divorcing but eligible for Social Security, it may be possible to continue claiming a former spouse’s benefits even after the divorce, depending on the circumstances. At the same time, an individual may also be able to accumulate deferral credits that allow Social Security to increase by a certain amount each year that it is deferred.
Source: Investment News, “When love won't keep them together,” Darla Mercado, May 11, 2014