Divorcing later in life can be difficult. You’ve spent some of your best years with your partner, and lived a full life during your marriage. If that life had extensive financial planning along with it, it could be a tall order to start untangling years’ worth intertwined retirement preparation.
The rate of divorce for couples over the age of 50 has nearly doubled in the last 25 years, and that can mean a very different process than those that split young. When you’re nearing retirement, you’ve likely got at least one plan set aside for the end of your career. If you’ve been married for a long time, then you’re probably going to hand a good chunk of your nest egg over during asset division.
Setting the stakes
When a court looks at dividing your assets, your retirement plans could be on the table. If a judge sees fit to give your partner a share of your investments, benefits or pensions, they might have you draft a qualified domestic relations order (QDRO). This order will instruct your account handlers on how to properly pay you and your spouse after the division.
The QDRO lays out the requirements of your agreement. It will name who gets the assets, how much they get and whether they are tied directly to you. Your partner may be able to begin receiving payments immediately, as opposed to waiting around for you to retire.
Checking the levels
Your spouse’s share will likely go up the longer you’ve been married. The growth of your accounts before you got married may not enter into the final equation, but contributions from the household and those that occurred after your vows may affect how much they receive. The counting will generally stop when you file for divorce.
Dividing accounts can be complicated, especially when dealing with overlapping timeframes and varied plans. Make sure you know what could be up for division, and you might be able to ensure your retirement can withstand the process.