There is a rising trend in the Dallas / Forth Worth area in family law: couples married for decades are filing for divorces. The median age of each person is just over 50 years, and many were married for at least 15 years. At this stage in life, the couple is fairly well-established in their respective careers, have a certain lifestyle to which they are accustomed, may be ready to take an early retirement, or may be considering what they’ll do in just a few years when they’re able to retire.
This new phase in life may also lead the couple to seek a divorce for several reasons. Although these divorces are commonly filed as the couple experiencing irreconcilable differences, the truth is that with an empty nest and more time alone, the couple may just not feel as if they have anything in common. Yet, regardless of the reason, there are some key considerations for Dallas / Forth Worth couples contemplating divorce.
Retirement Accounts and the Divorce Process
Texas is a community property state. Retirement is one of the assets that may be treated as community property under state law. Individuals divorcing after 50 must remember that the court may award part of their retirement account balance to their spouse. For the purpose of this discussion, we will use “retirement account” to encompass any and all retirement plans.
The law states that all divorce decrees must “determine the rights of both spouses” in regards to pensions, IRAs, 401(k)s, and other retirement accounts. This is an important concept because although retirement accounts may be community property, at least part of it may also be considered separate property. Separate property is defined as property that:
- Was owned or claimed by a spouse before marriage;
- Was acquired by a spouse as a gift, devise, or descent during the marriage; or
- Was a recovery amount paid for personal injuries of a spouse during a marriage except for funds paid for the loss of earning capacity.
The family court will determine whether any or all of your retirement accounts are separate property based on the evidence presented to support your position. For example, a petitioner or respondent may show that they began the retirement account before they were married by presenting documentation from their employer or the financial institution tasked with managing the account. The date listed as the opening date for the account would clearly need to be a date occurring before the marriage.
While the State of Texas uses a formula to divide retirement accounts deemed community property, the parties may also negotiate and agree on an amount. Parties may also agree on which retirement accounts may be split and which may be untouched and solely awarded to one party. The formula to divide up a retirement account involves the number of months the couple was married during the employment that resulted in the creation of the account divided by the number of months worked for that employer at the time the divorce was filed. The result of that calculation is multiplied by the value of the monthly benefit the employee spouse would receive on the date of divorce. It does not matter if the spouse is ineligible to retire on that date.
Retirement plans may need to be adjusted by each person because of the likelihood that one or both individuals will not be entitled to all of their retirement. Regardless of whether you desire to protect your retirement accounts or if you believe you are entitled to some of the retirement accounts of your spouse, it is imperative to secure representation from a Texas divorce lawyer with the necessary experience required in divorce matters for individuals over 50.
Division of Assets and Debts
In the State of Texas, assets and debts must also be divided. How they will be divided depends on whether the assets and debts are classified as community property or personal property. To claim that assets are personal property remember that:
- It must be proven the asset was acquired before the marriage;
- It must be proven the asset was acquired by one spouse as a gift, devise, or descent during the marriage.
Much like with retirement accounts, the couple may negotiate and agree on how assets and debts will be split between them. One party may be required to buy out the financial interest another party has in an asset if the couple agrees to assign specific community property directly to one spouse. In some circumstances, the couple may decide or the court may order that community property be sold and the proceeds from the sale will be divided between the parties. As we grow older, we may have more assets to consider. There may be vacation homes, timeshares (which may also be considered a debt as one can never own a timeshare), fine art, jewelry, nicer vehicles that are not currently being financed, and other items of worth. Both parties should sit down separately and decide where they are willing to compromise and which items they believe they must have as their share of the divorce settlement. Then, the parties may come together with their legal counsel and perhaps with the presence of a mediator to discuss potential settlement terms.
Debts (which may also be referred to as liabilities) may also be considered either community or personal property. However, there can be some blurred lines. Additionally, certain types of financed property that is titled in the names of both parties may be assigned to one spouse. That spouse will then need to go through the process of having the property refinanced into their name alone. A common example is a married couple who are both listed on a car loan. However, debts may also include often forgotten about issues: cell phone accounts, department store credit cards, and other similar accounts.
An important consideration related to debts is whether you will be held liable for the debt of your spouse. That is possible under Texas law if your spouse acted as your agent when they took on the debt or if they incurred the debt to purchase a necessary item. Necessary items in Texas are items such as food, shelter, clothing, and medical care.
Just like assets, the parties have the right to agree how the debts will be split.
Additional Costs May Be Associated with Divorces After the Age of 50
There may be additional costs in addition to legal fees regarding the divorce process. Certain assets may need to be appraised by a professional. You may need the services of accountants and financial planners. If you believe that your spouse is hiding assets, you may need a forensic accountant. You’ll need to have your estate plan updated as well. Because of the high likelihood of complex scenarios, it’s essential that you are represented by a divorce lawyer with experience managing the divorce process for clients who are 50 years of age or older.
With more than 20 years of experience, our experienced, compassionate attorneys can help you navigate the divorce process. To schedule your free initial consultation, call us today at 214-265-7630.