How is Asset Division Different in a Gray Divorce? | TX

 Posted on September 30,2024 in Property Division

Asset division can be complicated in virtually any divorce, but it is more complicated in a gray divorce. Gray divorce refers to spouses in their late 50s, 60s, and 70s who choose to divorce. This demographic has significantly increased over the past three decades. In fact, the divorce rate for those over the age of 55 has doubled since 1990, and for couples over the age of 65, it has tripled.

One in 10 people divorcing today is 65 or older. Although gray divorces can be easier in some ways—notably, the children are grown, and custody issues are not a factor—they can also be more difficult in other ways. Older people are likely to have more assets yet less time to plan for retirement.

There may also be considerations involving health insurance coverage, Social Security, retirement funds, long-term care, and inheritances. If you are considering divorce over 50, there may be special asset division issues to contemplate. Speak to a knowledgeable McKinney, TX asset division attorney from The Ramage Law Group to ensure your future is protected and you receive your fair share of the marital assets.

How Are Marital Assets Divided During a Gray Divorce?

Significant accumulated assets may be up for division in a long-duration marriage, including the marital home, perhaps a second vacation home or rental properties, retirement accounts, valuable personal property like antiques or jewelry, and business interests.

In some situations, an older couple may also have significant debt, which can make debt division more difficult than asset division. Since Texas is a community property state, assets and debts are usually divided equally. Issues to address for those considering gray divorce include:

•  Retirement accounts are a big consideration, and the timing of disbursed funds and how that affects taxes must be taken into account.

• Businesses or professional practices may require a professional business valuation.

• Portfolio investments must be divided in such a way as to avoid loss of value.

• An ex-spouse who was married for more than 10 years and who is over the age of 62 may be able to draw up to 50 percent of the ex-spouse’s SS retirement benefits.

• The marital home will either be sold, with the proceeds divided between the spouses, or one spouse may choose to stay in the home in exchange for other assets given to the other spouse.

Since a home can affect Medicaid for long-term care, it is important to speak to a professional to determine whether spend-down is necessary before the divorce or after. Health insurance coverage is another big issue for those over 50 but not old enough to be eligible for Medicare.

If one spouse has gotten his or her health insurance through the other spouse’s work, it must be determined how that spouse will now get health insurance. Splitting retirement accounts is notoriously complex, especially if you and your spouse are too young to withdraw funds from a 401(k) or IRA fund. There is usually a 10 percent early withdrawal penalty for most retirement funds, but there could be an exception for divorce division. Since older people divorcing need a solid financial base so they can enjoy retirement, getting the "fair share" of the marital property is crucial.

Contact a Collin County, TX Gray Divorce Lawyer

When you choose a McKinney, TX gray divorce lawyer from The Ramage Law Group, you have taken an important first step in ensuring your future is protected. Our attorneys understand the circumstances that affect today’s families and the uncertainty these events bring. We believe in families and will work tirelessly for our clients, allowing them to face the future with hope. Our focus is on collaborative law and client relationships. Contact The Ramage Law Group at 972-562-9890 to schedule a meeting with an experienced family law attorney.