Hartley Law Office, LLC

Hartley Law Office, LLC

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Keeping retirement in mind during a gray divorce

When couples in Ohio go through a divorce later in life -- after the age of 50 or so -- the divorce may be less complicated in some ways than it typically would be at an earlier age. The main reason is that a couple's children are likely fully-grown adults, and so there are no issues of child custody or child support to resolve. But a gray divorce is not necessarily without its own challenges.

Perhaps the most significant challenge will be determining how the divorce will affect each partner's retirement. Any funds saved up in retirement accounts, 401(k) accounts, pensions and other sources of retirement income will presumably be divided between the spouses. This means there will be substantially less money than either partner was likely prepared to live off of in retirement. In addition, any transfers not managed properly through a Qualified Domestic Relations Order could incur tax liabilities or early withdrawal penalties.

Dayton couples over the age of 50 are likely to have more valuable assets than their younger counterparts: for example, the equity in their homes. That, however, can be a problem if one partner relies too heavily on home equity during property division. Even substantial equity can suffer losses or be completely wiped out by major market fluctuations. Older people with fixed incomes are particularly vulnerable when unexpected medical bills mean they cannot make their mortgage payments.

While a gray divorce is likely not complicated by children and may even be an amicable separation, it is important not to overlook the potential ramifications of property division on retirement. It is important that a gray divorcee understands his or her rights and the implications of asset division.

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