Increasingly, legal professionals are dealing with the complicated consequences of divorces between older or long-married couples. Stay-at-home moms and dads who have not held a job for decades must now find a means of financial support. Belongings built up over decades of marriage must be divided between people who, in many cases, have an equal emotional stake in them.
At any stage of life, divorce is a complicated and challenging process. Divorcing after the age of 50 creates an even more complex situation that can seem as legally ambiguous as emotionally taxing for the couples dealing with it. This is why a family law firm experienced with gray divorce cases can help you secure your belongings, your finances, and your future throughout the divorce process.
What is a Gray Divorce?
Gray divorce, defined as a divorce where both members of a couple are 50 years of age or older, has been steadily increasing in recent years. The causes of gray divorce vary from health problems and financial troubles to differing retirement goals. Marriages younger than 10 years old and between spouses who were previously married are at even higher risk.
Regardless of the cause, gray divorces have many of the same emotional, financial, and legal complications as divorces at other ages. Though child custody and child support are not usually an issue in gray divorces, the reality of separating retirement funds, dividing decades worth of property, and splitting personal and business interests is often more complex than usual.
Tips for Legal Preparation
While the full implications of legally preparing for a gray divorce cannot be covered in one article, this broad summary of two crucial elements of preparation – asset division and financial preparation – can help you start the process on the right foot.
Contacting a family law firm experienced with gray divorce legal preparations is the best way to understand how these general tips and strategies apply to your specific situation.
Asset Division
The legal implications of asset division in divorces vary by state. In nine states, courts use the “community property model,” which states that marital property is split 50/50 in a divorce regardless of extenuating circumstances.
In the remaining forty-one states (including Maryland), courts follow the model of “equitable distribution,” meaning the division of the property depends on the results of the divorce negotiations.
To negotiate the division of marital assets, couples must first distinguish between separate (non-marital) and marital property.
Separate property, which is not divisible during a divorce, includes a spouse’s personal inheritance, personal gifts, and the assets they owned before the marriage. In Maryland, belongings and property acquired during the marriage are considered marital property, including investment properties.
Since older couples usually own more marital assets than younger couples, asset division is often more complex in gray divorces. Rather than leave the decision to the court, many couples come to asset division settlements as the result of mediation.
Mediation gives couples the opportunity to negotiate their personal, professional, and financial assets with an impartial third party. Assets include not only homes, belongings, and vehicles but also loans, annuities, stocks, credit cards, bank accounts, documents, intellectual property, and more.
Although mediation is conducted outside of the courtroom, in many cases, attorney guidance is still advisable to ensure a fair division. This includes having an attorney review any agreement prior to signing.
Financial Preparation
Asset division is not the sole financial consideration for couples proceeding with the divorce process. Preparations should also include a more detailed approach to their finances, including how each spouse’s retirement will be handled now that they will no longer be each other’s beneficiaries.
Since most couples will be preparing for retirement with funds such as IRAs and 401ks, that money will need to be moved or reallocated to reach a fair settlement to both parties. Unfortunately, for couples younger than the age of distribution, which is after age 59, this can have a complicated impact on the future of their retirement payments.
Since early withdrawals from pensions and retirement accounts lead to penalties, couples must take extra steps to make sure these accounts are not drained by the divorce process. In Maryland, this involves filing a QDRO or Qualified Domestic Relations Order. This document allows the spouse who is not the plan holder of the retirement account to receive a percentage of the payout at the appropriate time.
This can result in an immediate division of the funds or an established support payment schedule. While couples can file a QDRO themselves, Maryland courts are empowered to do so to resolve disputes over retirement assets.
Trust an Experienced Attorney to Handle Your Gray Divorce Case in Maryland
Gray divorces can cast doubt on the financial security of your future, especially in cases involving shared retirement funds. However, with the right legal advice, couples can embrace their separation as a midlife reinvention by maneuvering through the complex and often emotional processes of asset division and financial preparation.
At Milstein Siegel, our experienced attorneys have strategically assisted spouses in Maryland with complex divorce cases for over 30 years. We understand the battles that couples over 50 face as they attempt to financially and legally prepare for their divorce proceedings.
Our team is devoted to fighting for your rights and finding creative solutions to the wide range of issues related to gray divorce negotiations. Contact us today to learn how we use our expertise in Maryland divorce law to help our clients reach the best possible outcome for their situation.
