Divorce over age 50 is relatively common. According to the Census Bureau, over 15% of adults over 50 are divorced and another 2% are separated from their spouses. Divorce can often be an inevitable result with children gone, ample financial resources available to live separately, and the impact of years of emotional distance. 50 is the new 40 and many understand that the best of life is often yet to be. However, divorce under even the best of circumstances can be a stressful and anxious time without the proper preparation and knowledge.

The following are some issues typically considered in over age 50 divorces:

Division of Non-Retirement Assets and Debts:

After a long marriage, divorcing parties often have substantial assets and debts to divide. That division in divorce (called “equitable distribution” when done by the Court) can be complicated due to the differing asset types accrued after a long marriage and fact that often one spouse may hold much greater assets than the other. In some cases one party has always been responsible for paying the bills and keeping track of finances, while the other might be less aware of exactly how much is owned and owed. Even prior to meeting with an attorney, an inventory of the type, value and location of each asset held solely or jointly by you and/or your spouse should occur. Make sure to contemplate the value of each particular asset on the date of marriage, on the date of separation (if applicable) and currently. Also, the manner in which assets were accrued must be evaluated i.e. did they arise from the contribution of separate property such as an inheritance, gift or pre-marital acquisition or were they accrued solely from income of the marriage? Information of when an asset was acquired and from what source is crucial as while assets accrued from the date of marriage to date of separation may be considered “marital property” (to be divided between the parties), pre-date of marriage and post-date of separation assets are generally considered the “separate property” of the account holding spouse so long as certain requirements are met. As with assets, debts must be analyzed in order to properly classify and evaluate them.

An analysis must be undertaken for any debts such as credit card balances, mortgages, liens or other types of obligations. As with the assets, you will want to be informed as to how those debts were established i.e. did they arise prior to the date of marriage and/or date of separation or were they accrued afterwards? Debts incurred from the date of marriage to date of separation may be considered marital debts to be divided between the parties. Pre-date of marriage and post-date of separation debts are generally considered the debts of the incurring spouse so long as certain requirements are met. However, debts incurred after the date of separation (consolidation of marital credit card debt for instance) can be divided as marital debts. Being prepared prior to meeting with an attorney will help you makes the best use of time with that attorney and diminish feelings of being overwhelmed and/or unprepared.

For more information on property division in Virginia divorces, read further:  Property Distribution in Virginia 

Division of Retirement Assets:

Like the non-retirement assets and debts discussed above, division of retirement assets is a major focus of equitable distribution for individuals over 50. One spouse may “hold” and/or have earned the retirement a particular retirement asset. However, the asset (whether it be a 401k, IRA, Pension, or other differed compensation plan, etc.) is subject to equitable distribution and the “non-owning and/or non-earning” spouse is likely to be awarded a portion of the retirement assets by the Court (up to 50% of the marital share but no greater than 50%). Analysis must be undertaken to determine if the funds were contributed and/or accrued prior to the date of marriage and/or after the date of separation?

That information is crucial as while date of marriage to date of separation contributions and accruals may be considered as a marital property to be divided between the parties, pre-date of marriage and post-date of separation contributions and accruals are generally considered “separate property” of the account holding spouse. Most of the time, such divisions, whether through equitable distribution or by agreement of the parties, can be structured to occur with no adverse tax consequences so long as same is incident to divorce and the asset is not liquidated. A Qualified Domestic Relations Order (QDRO) or Court Order Acceptable for Processing or Letter of Instruction which enables the agreed upon (In the case of a settlement) or awarded (in the case of a Court decision) transfer the portion of the assets.

For more information on property division in Virginia divorces, read further:  Property Distribution in Virginia 

Duration of Alimony and Spousal Support Obligation:

The area of spousal support is particularly sensitive when divorcing over 50. Careful attention must be paid not only to the amount of spousal support proposed but also to the duration of support given that the payor spouse is typically foreseeing retirement in the near future. Unlike younger couple’s divorce, where spousal support payments are often awarded for a finite period of time, a long term marriage may result in support of a “permanent” nature. Both are possibilities, but will depend on a variety of factors related to your marriage including, financial resources, standard of living and individual circumstances. However, the two greatest overriding drivers of spousal support are 1) Need of the payee spouse and 2) Ability to pay of the payor spouse. Negotiation with the assistance of a skilled attorney is absolutely essential given the highly technical and fact intensive nature of spousal support determinations.

For more information on spousal support, read further:  Spousal Support 

Health and Medical Considerations:

If a spouse is covered on the other spouse’s insurance policy, the covered spouse may need to obtain their own health insurance coverage post-divorce. It is often expensive and difficult for people over 50 to get coverage due to advanced age and pre-existing medical conditions (although rapidly developing federal and state laws are impacting this area). However, advance planning for is necessary as it may take months to research and apply for an insurance policy. Consider plan options that are non-cancelable, with guaranteed renewable coverage when possible. Medicare eligibility begins at age 65 but does not cover all costs. A separate policy is still necessary. For more information on Medicare see https://www.ssa.gov/medicare. Medicaid may also be available as you age but is limited. For more information on Medicaid see http://www.dmas.virginia.gov. In divorce negotiations a party may seek, or agree, to keep the uninsured spouse on his or her insurance plan until the divorce is final.

After divorce, with exception, the covered spouse will no longer qualify to remain on the former spouse’s policy. Such exception include remaining insured on the plan through COBRA for up to 36 months after the divorce. When the 36 month period has elapsed, some plans will give the non-covered spouse “conversion coverage,” which allows you to convert from a group to an individual policy without being denied due to a pre-existing medical condition. Other individuals with pre-existing conditions may be eligible for coverage under “HIPAA” (see www.hhs.gov/ocr/hipaa/ for more information). Oftentimes, the former spouse of a federal civil servant may be entitled to continue the coverage they had while married even after divorce at a great cost savings as compared to private policies. However, strict rules exist as to eligibility and election for such coverage by policy deadlines.

Estate Planning & Beneficiary Designations:

When divorce is imminent, you will need to revisit your estate plan and other arrangements for the event of your incapacity or death. This includes documents such as your Last Will and Testament, any powers of attorney designations for beneficiaries regarding bank accounts, retirement accounts, and other financial accounts. Arrangements made during your marriage probably do not reflect your current desires. Importantly, a divorce does not serve to revoke all the beneficiary designation made in marriage. In fact the opposite is often the case. Cases exist where a former spouse of many years prior ended up with a 401k simply because the account holder did not take the steps required to revise beneficiary designations post-divorce. The issue is of such weight that the following Notice, which is required to be included in all Final Orders of Divorce, has been codified into Virginia law:

“Beneficiary designations for any death benefit, as defined in subsection B of § 20- 111.1 of the Code of Virginia, made payable to a former spouse may or may not be automatically revoked by operation of law upon the entry of a final decree of annulment or divorce. If a party intends to revoke any beneficiary designation made payable to a former spouse following the annulment or divorce, the party is responsible for following any and all instructions to change such beneficiary designation given by the provider of the death benefit. Otherwise, existing beneficiary designations may remain in full force and effect after the entry of a final decree of annulment or divorce.”

As the above Notice makes clear, a divorced party is well advised to take stock of their beneficiary designations and make immediate revision of their designations to ensure that that party’s wishes are fulfilled in the event of their death post separation. Please remember that all situations are different. The above is merely a brief overview of some aspects of a divorce for those who may be over age 50. However, the issues raised above may not apply to all situations and/or may not be comprehensive. At the Law Office of William R.F. Conners, P.C, our experienced attorneys can discuss with your individual needs related to your pending divorce. Contact our office to arrange a domestic relations consultation so that you can become fully informed as to your rights and obligation.