Divorce rates are dropping among younger adults, but it is increasing among older adults. “Gray divorce” refers to this phenomenon, and the 65 and older age group is getting divorced at a rate that is three times higher than it was in the 1990s. Since Texas is a community property state, this means that assets are supposed to be divided equally.
This can mean making substantial changes to retirement planning. Money saved in retirement accounts was intended to support one household, not two, but people getting a divorce may need to divide their 401(k)s, IRAs or other retirement accounts. Some people may want to try to keep the marital home, but this can be expensive in terms of upkeep and taxes. It is important to understand the financial implications of doing so.
Spousal support may be temporary when younger people get a divorce, but it might be permanent for older adults. Some people may need to seek new health insurance after a divorce. For marriages that have lasted a decade or more, a lower-earning spouse may also be able to draw benefits on the other’s Social Security contributions in certain circumstances. Individuals who remarry may want to consider a prenuptial agreement since second marriages are more likely than first marriages to end in divorce.
Couples may want to consider negotiating an agreement for property division instead of going to court. Mediation can help even in high-conflict situations since the purpose is to reach an agreement that is mutually beneficial. This may give the couple more flexibility than they would have if they went to court. For example, they may not want to divide all their assets 50/50. Negotiating out of court may give them the opportunity to come up with a creative solution that better suits them both.
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Author: On behalf of Katie L. Lewis of Katie L. Lewis, P.C. Family Law