Whatever the reasons for the divorce, the family lawyer quickly realizes that the concerns and needs of both parties will vary significantly from those involved in a divorce at an earlier time in their lives. For one thing, the estate that exists now for this couple is probably all there is going to be. They cannot count on substantial additional income or new sources of income in the future.
A 40-year-old CEO may be willing to be generous to a departing spouse, knowing that she will make much more money in the future. A 65-year-old spouse cannot expect the same kind of additional largesse beyond the return on investments already made.
Older couples who are divorcing also need to consider very carefully a variety of concerns that may not trouble younger divorcés to the same degree:
- Social Security
- Long-term care insurance
- Life insurance
- Lifetime health insurance
- Retirement packages, supplemental policies, 401(k) plans
- Selling—or not selling—the house
- Estate-planning documents that impact assets
There are special, key considerations that must be addressed. If the couple has not been married for at least 10 years, the nonworking spouse or the spouse bringing in less income has no claim for benefits that are related to the other spouse’s Social Security contributions. Also, if one party has been receiving Social Security for less than two years, the other party has no claim on his/her Social Security in a divorce. If the two-year window has passed, the divorcing spouse may be entitled to a payment that is essentially one-half of the other’s calculated Social Security payment. This payment has no impact on the original Social Security earner. Thus, this is an important benefit.
In any case, by law, Social Security payments cannot be divided up. If one spouse receives the Social Security payments, the task is to determine how the other assets are divided. Payments received during the marriage are community property. Payments after divorce are separate property.
What if both spouses have been paying premiums for term life insurance for 20 or 30 years? Will a new spouse now receive the benefits on the death of the insured? If a divorcing spouse can no longer afford to pay premiums on life insurance, will that spouse, perhaps at an advanced age, even be able to acquire new, more affordable insurance? A younger spouse would be able to discard a term policy, but older persons may see the intrinsic value of maintaining the policy. Overall, the cost of health insurance, supplemental care and uninsured medical expenses require serious investigation and valuation.
If the two spouses decide to sell the marital house while they are still married, the ceiling on the value of the sale before capital gains taxes kick in is $500,000. If a divorced spouse sells the house later, the ceiling before capital gains taxes occur is only $250,000 per person.
There may also be extensive issues involving children, grandchildren, even great-grandchildren. In today’s complicated, multigenerational and blended marital relationships, the divorce may need to take into account her descendants, his descendants and their descendants. The issue is not only which partner gets what today, but which descendants may ultimately get what in the future. Careful estate planning may be required, in addition to the valuation of all assets, etc., in conjunction with the divorce.
As people are living longer, they are less likely to put up with a bad situation that sours the part of life that they had perhaps planned to enjoy most, once they were freed from workplace obligations and the needs of growing children. Who wants to travel, enjoy new experiences, and spend time with grandchildren saddled with a companion who is a constant annoyance? Family lawyers should be aware that elder divorce is likely to continue to increase and will require a different approach and additional tools than divorces that occur among younger couples.
Susan Myres is a board-certified family law attorney who has been practicing in Houston for over 35 years. She has served in leadership positions locally, statewide and nationally, and is currently president-elect of the American Academy of Matrimonial Lawyers.