As recently as the 1990s, divorce over 55 was almost unheard of. In the ensuing years, the overall divorce rate dropped even further. But the over-55 marriage dissolution rate has doubled since then.
There are several reasons why the grey divorce rate has increased so significantly. The average lifespan has increased since then, and the quality of life for people over 65 has improved as well. To many 50-somethings, another twenty-five years is a long time to spend in an unsatisfying marriage, especially since most of those years should be active years.
Furthermore, divorce’s moral acceptability rating recently hit an all-time high. So, people who never would have considered divorce are at least giving this proceeding a second look.
Grey divorces present special issues for Buffalo, MN divorce lawyers. Financially, couples in this age bracket usually have more assets than debts. Emotionally, they may no longer have children at home, but there are still some child custody issues to deal with.
Home Equity Division
Due to loan amortization, people who have lived in their homes for fewer than ten years generally have little equity. The lion’s share of each monthly installment payment goes to prepaid interest instead of the UPB (unpaid principal balance). Simply stated, the bank gets paid before homeowners build equity.
During the second half of the loan period, the division is reversed. Since the loan’s interest is mostly paid, much of each payment goes to home equity. In other words, the house is an asset instead of a debt.
In financial settlements, Buffalo, MN divorce lawyers often go with sale-and-division language. Selling the house and dividing the proceeds gives everyone a clean break. Additionally, many couples of this age downsize their housing, whether or not they stay together. But the sell-and-split approach is not always best, particularly if the market is depressed.
So, an owelty partition lien might be an option. One spouse stays in the house, and the other spouse receives a lien for his or her share of the equity. Later, when the owner spouse sells the house, that lien must be paid.
A couple of housekeeping notes may be appropriate. First, Minnesota is an equitable division state. Marital assets, including home equity, must be divided equitably, which is not necessarily the same thing as equally. Second, divorce changes the names on the deed, but does not change the names on the note. Refinancing the loan is usually the only way to delete a borrower’s name.
Buffalo, MN Divorce Lawyers and Visitation Issues
Most couples over 55, and certainly most couples over 65, no longer have minor children at home. But that doesn’t mean there are no child custody issues.
Young children usually adjust fairly well to a parental divorce. But many adult children have a hard time dealing with their parents’ split. Adults are not as emotionally resilient as children. Furthermore, adults have a lifetime of happy family memories.
So, the children often “blame” one of their parents for the divorce. Children might exact revenge on the at-fault parent by cutting off visitation between grandchildren and grandparents.
If that happens, grandparents might be able to obtain some limited visitation rights. The parental presumption in Minnesota is very strong, so for the most part, parents have an almost unlimited right to decide where their children spend their time. But some limited visitation might be available, based on factors like:
- Prior grandparent/grandchild relationship,
- Extent of the relationship (i.e. were the grandparents mostly caregiver or mostly babysitters), and
- Best interests of the child.
A Buffalo, MN divorce lawyer is obviously not a family therapist, but there are some ways to avoid these unpleasant confrontations. Be open with your adult children about the reasons for the divorce. Furthermore, avoid bringing paramours to family functions and make an effort to get along well with your ex.
Retirement Account Division
Back to marital property division. Other than home equity, an IRA, 401(k), or other retirement nest egg is probably a couple’s largest asset. Retirement accounts also have an emotional value. They represent security and reward for diligent savings.
Even if only one spouse contributed money to the account, the account is still marital property subject to equitable division. Many non-owner spouses elect to roll their shares into a new tax-deferred account. They can keep making contributions and not pay a tax penalty. Others choose to cash out their shares and pay a penalty. Still others elect to do nothing and receive an equitable share of future disbursements.
Special rules apply in military retirement account divisions. Generally, the government will not authorize anything other than a 50-50 division, and that’s assuming the marriage lasted at least ten years and the account-holder has at least ten years of service.
Connect with an Assertive Attorney
Over-55 divorces have some special financial and emotional issues. For a free consultation with an experienced Buffalo, MN divorce lawyer, contact Carlson & Jones, P.A. Convenient payment plans are available.