Florida Gray Divorce
Friends and family may be surprised at the announcement, but, after decades of marriage, you and your spouse are calling it quits. While it may shock those in your circle, the fact is that twice as many people over the age of 50 are divorcing today than did in the 90’s. The option for empty nesters is available largely because women have played a greater role in the earnings market, and have the skills and finances to move on if the marriage is no longer working. Nonetheless, gray divorce is a big deal, with impacts that must be considered carefully before moving forward.
Splitting Marital Property
If it’s been purchased, acquired, or earned during the years you were married—(with the exception of gifts given to one spouse exclusively), it’s considered marital property. You may think that since it’s in one party’s name alone, it belongs to them. Not so, say the courts.
IRA’s and 401(k)’s must have a single account holder according to law, but technically the money belongs to both parties if they’re married. As part of a divorce settlement one spouse may wind up having to transfer money into another account for their ex.
- IRA’s: If the divorce decree calls for it and it is filed with the custodian it’s ok to roll over funds from one IRA to another in a split.
- 401(k)’s: A qualified domestic relations order (QDRO) must be filed with the court to indicate the money division, and the rollover should occur within 60 days is the best outcome tax-wise. The spouse who is receiving funds can use some of it for immediate expenses without the 10 percent penalty that applies for those under 59 ½ years old, but keep in mind they’ll still have to pay state and federal taxes on those withdrawals.
If you earned your pension during the course of the marriage, it probably will be on the table as a marital asset. Generally speaking, a pension is simply a shared asset that is to be considered among those to be divided in a divorce.
This is one benefit that is a win: win! If you were married for 10 years or longer, the lesser earning spouse may qualify for as much as 50 percent of the higher earner’s retirement-age Social Security benefit, with no penalty to the higher earner.
If one of you comes into a significant inheritance and the money was tucked away in an individual account, it may wind up sticking with that person following divorce. If, however, the money was part of joint monies, it’s possible a judge may rule that it’s marital property and part of assets to be divided.
Taking Care of Your Gray Divorce
The experienced Boca Raton divorce attorneys at WiseLieberman recognize the special interests associated with gray divorce and will address the matters that concern you most. To discuss, schedule a confidential consultation in our office today.