Divorce is difficult. It can be even more difficult later in life, particularly when approaching old age. The number of these so-called grey divorces has skyrocketed in recent years. In addition to the more challenging emotional aspects of divorcing later in life, there are financial and medical considerations to make. Not only will there be retirement accounts to consider, but any financial mistake that a person makes while going through a grey divorce can be more challenging to overcome. Whether you were the primary earner in the marriage or not, the most important step is to speak with a qualified attorney.
Retirement Accounts and QDROs
If you have a joint retirement account with your soon-to-be ex and do not have a similar account in the name of the non-account holder, you will need to open one. If the retirement account is to be divided, you will need to directly transfer the money from one account to another so that neither account holder is taxed for the transfer. Any money deposited into a joint retirement account during the marriage will be subject to equitable distribution laws. If the owner of the account is younger than 59 ½ and the money is withdrawn before the divorce is finalized, he or she may be subject to a withdrawal penalty; money transferred during divorce proceedings or during separation will be subject to taxes. A qualified domestic relations order (QDRO) is required to make this type of transfer when holding a traditional workplace retirement account. Using a QDRO when transferring from a retirement account ensures that the transfer will not be taxable.
Review Your Estate Plan
You will then need to update the beneficiary information in your will and life insurance policies. Many people do not update their estate plans on a regular basis, and as such, this can be one of the most overlooked steps in the divorce process. An estate plan not only defines what will happen with your assets upon death, but also who will be responsible for making medical decisions if the person is no longer to make them him or herself. Even if one of the parties remarries, if he or she did not ensure that the beneficiary information was changed after divorce, his or her ex-spouse may still have control of certain assets in the event of his or her death.
Grey Divorce Help
Dividing up retirement plans and considering estate plans are just two of the complicated processes in grey divorce. If you are considering divorce at any age, contact an experienced Kane County family law attorney today. Call 630-879-9090 for a free, confidential consultation today.