Issues facing couples in gray divorces

Texas couples who get divorced in their 50s must pay special attention to retirement assets and issues.

According to CNBC.com, the National Center for Family and Marriage at Bowling Green State University reported that 25 percent of all divorces today involve spouses over the age of 50. The gray divorce phenomenon spans the country and certainly couples in Texas are not immune to it.

People who end their marriages at this stage of life need to pay special attention to their property division settlements. Every asset that could be split, kept or sold is likely to have an implication on both partners’ future incomes and retirement lifestyles.

Is the home a good thing to keep?

Many spouses, especially wives, automatically want to keep and stay in their homes after getting divorced. NextAvenue.com points out that this is normal because of the emotional attachment and security that it can provide during an otherwise tumultuous time.

But, an article on the Huffington Post points out a few ways in which this could be a very bad financial decision. Even a home that no longer has an associated mortgage could end up costing more than other assets when capital gains are assessed after a future sale.

Some of the factors to consider about a family home include the projected future costs of ownership. Property taxes, homeowner’s insurance, regular maintenance, repairs and any emergency fixes can all take a big chunk out of a total asset value. The mortgage interest rate as well as monthly payment should be calculated and the spouse wanting to keep the home should determine whether or not a solo refinanced mortgage can be obtained.

Should all retirement accounts be split?

Many people assume that all retirement funds will be split in a divorce. However, as with a home, this may or may not be the best choice. One issue is that many of these accounts have assets based upon money not yet taxed. That means any future income will be reduced by the ultimate tax burden.

If it is deemed wise to split a retirement account, a Qualified Domestic Relations Order should always be utilized. Without the QDRO, any transaction could be subject to income taxes and other penalties or fees. This can deplete large portions of precious retirement assets.

Consider other benefits

In addition to these assets, things like social security benefits and costs for private health insurance should be taken into account when determining a settlement. These factors can change the overall landscape of a property division agreement.

It is reasons like this that make it important to work with an experienced attorney when getting divorced in Texas.

Keywords: divorce, retirement, assets, property

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