In the last few years, it seems that more and more older couples are choosing to end their marriages. While the divorce rate in Kansas and across the United States has declined as a whole, the rate of divorce among spouses age 50 and older has skyrocketed. This phenomenon has become known as gray divorce. Gray divorces are often more complex, since those who separate later in life have usually acquired many assets and have built up retirement savings. Here are some ways retirement accounts and savings may be impacted in a high asset divorce
Retirement accounts
By law, individual retirement accounts (IRAs) and 401(k)s can only have a sole account holder. However, the funds that are put into these accounts during the marriage technically belong to both spouses. In the divorce settlement, the spouse with a larger balance will sometimes need to transfer funds to the other party’s account. Regarding 401(k) funds, both parties will need to file for a qualified domestic relations order (QDRO) from the court to spell out how the money needs to be divided.
Social security
Retirement accounts may be subject to a lot of compromise and wrangling in a divorce settlement. When it comes to Social Security, the benefits are controlled by law, thus not really open to interpretation. If spouses were married for at least 10 years before separating, an ex-spouse may be able to apply for monthly benefits based on the work record of the other spouse.
Although there are often complicated issues to resolve in every divorce, this experience does not have to include a lengthy and messy court battle. For those in Kansas who are facing a divorce, it is recommended to speak with a knowledgeable and trusted lawyer. A seasoned attorney can answer questions, provide guidance and help to reduce the stress associated with the end of a marriage.
