Wednesday, August 1, 2012

Unique Issues for the Baby Boomer Divorce

It's no secret that Baby Boomer Divorce's are on the rise. According to the Office for National Statistics, divorce is decreasing in every age group except for couples in their 60s. U.S. Census Bureau reports that 25% of all divorces occur between couples who have been married 20 years or longer.


SEVERAL REASONS FOR BABY BOOMER DIVORCES:


1. Waiting until the kids are grown and out of the house: Prioritizing your children over your happiness is admirable. As such, many people choose to stay in an unhappy marriage until their children have embarked on their own lives.


2. The increase in relationship separation in the golden years could also be a change in priorities. As people get older, their financial stability and emotional security become most important. A spouse's substance abuse, gambling issues and/or verbal/ physical abuse may become unbearable and a search for independence and support becomes key to a healthy future.


3. Waiting for Financial Security. Women especially are often concerned that a divorce early in their lives will lead to financial devastation. Divorce is expensive and separating couples often want to wait to see if there will be enough assets for two people to live comfortably in two different household.


4. Not wanting to upset family friends. Long term relationships often mean strong ties to their partner's family and friends. It is difficult enough to take care of your own needs and emotions during crisis -- the fear of losing your support system or hurting people that you have established strong bonds with can be frightening.


5. Choosing Divorce as laws become more equitable. Laws have changed making the division of property more equitable especially in California where we have community property laws. Division of assets is now more fair -- virtually everything acquired during the marriage with community funds (e.g. employment earnings by either spouse) must be divided equally.


DIVORCE TIPS FOR BABY BOOMERS


1. Settlement is more important than ever: Legal Fees can be far more expensive for divorces with assets over 1 million dollars. When choosing an attorney to assist you, ensure that s/he is experienced with not only litigation, but mediation or collaborative law as well. A talented negotiator with a strong legal strategy can help keep legal fees reasonable, confrontation low and "damage" controlled. 




2. Social Security: Just because social security benefits cannot be divided in a divorce, does not mean you should ignore the rules that impact your benefits if you marriage lasted more than 10 years. Educate yourself on rules that such as whether or not you are entitled to survivor benefits if your former spouse dies. Additionally, if you are over the age of 62, you can collect benefits after the divorce on your former spouse's record without your former spouse receiving a reduction of their own benefits. 




3. Managing Debt: If you were not the primary bread winner while married, it is important to establish credit after the split. If the relationship is troubled, it might not be a bad idea to take out a credit card in your own name while you are still married. If you are a joint account holder and/or authorized user and your spouse is racking up significant credit card charges, distance yourself as much as possible by having your name taken off the account and alerting the financial institution that you are separated. Even so, you may be responsible for a large portion of the debt so establishing a separation date is key and closing those accounts from further use.


4. Health Insurance: Medical insurance can be a major issue for baby boomers, especially for the spouse that receives health insurance through the other spouse's employment. Upon Dissolution of Marriage, health benefits cease for the non-employee spouse and that individual will need his or her own plan. While laws have changed and/or are being implemented with respect to health insurance, at this point and time, many of our clients fine COBRA and/or a new policy expensive. Payment of a health insurance premium and/or medical bills may need to be addressed in the divorce action. 


5. Dividing Retirement Benefits: It is essential the retirement accounts are properly considered and divided. In most cases, a document (in addition to your Judgment) MUST be prepared to ensure the non-employee spouse receives their share and the employee spouse can receive benefits upon retirement and/or access her/his share before retirement. 


6. Creating a financial plan: It is very important to develop a post-divorce financial plan and budget. You will need to determine when you can retire, if spending needs to be cut back, or if you should revise your retirement plan. Your budget will keep you from depleting assets to sustain your daily needs. You may also decide to review your estate planning documents and insurance policies. Beneficiary designations may ultimately need to be changed.


7. Emotional Impact: While all divorces and/or domestic partnership dissolutions are painful, a separation after a long-term relationship can have far more impact on your psyche even if the decision was mutual. Just remember, no matter how difficult it is in the moment, it will not always be this hard -- your pain is not permanent. Find personal and professional help that you need. Reinvent your life, try something new, reach out to family and/or friends, join a support group -- just do not use your attorney as a therapist -- she's not trained as a counselor and your fees are better spent on experienced advocating!


Over 50 Discount: Mention this blog to an attorney at Levine Law Group during your initial legal consultation and receive a 10% discount.





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