Divorce brings opportunities and challenges to older couples
The gray divorce phenomenon has been discussed quite a bit lately in the media, with recent reports indicating that about a quarter of all divorces involve a spouse who is 50-years-old or over, according to Bloomberg. As such, how divorce can end up affecting retirement plans is becoming an increasingly important issue. For older divorcing couples in Texas, gray divorce and retirement plans are further complicated by the state’s community property laws.
Hidden assets and debts
Texas is one of a handful of community property states, meaning that, with some exceptions, assets and property acquired during a marriage are the property of both spouses and can therefore be divided equally upon divorce.
Community property laws can lead to some interesting situations during a gray divorce, however. According to USA Today, hidden assets, such as bank accounts that one spouse hid from the other during a marriage, are becoming increasingly common during a divorce. In many cases, these assets can be divided between both spouses and can have a big impact on retirement funds. However, debts, too, are considered community property, meaning that spouses could be on the hook if their soon-to-be ex-spouse has been hiding debts during the marriage.
Retirement and health
To protect retirement plans, older divorcing couples should focus on what is going to be most important to them in the years ahead. People can usually claim a portion of their ex-spouse’s Social Security benefits, for example, and anything that can contribute to one’s retirement funds is a likely advantage.
Additionally, people need to realize that health costs are going to become increasingly important as they age, whereas holding onto the marital house or family car might not make as much sense heading into retirement. Divorce settlements are typically final, meaning it is important for people to work out a divorce that accounts for their retirement needs and provides them with important health coverage for their golden years.
Given the financial stakes involved, it is important for people going through a divorce to make sure they have professional advice on hand at all times, especially if they are preparing for retirement in the near-future. While divorce is never easy, an experienced family law attorney can at least make the process more comfortable and secure by providing advice and help for clients who have chosen to take this important step in their lives. With the right legal guidance, divorcing spouses will have somebody at their side whose experience and expertise can be used to make sure a divorce settlement is fair and satisfactory.