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A Seniors Guide To Divorce: What's Really At Stake?

2 April 2015 by Louise Boyd

The decision to pursue a divorce is a deeply personal one, but for some seniors, more is at stake than they might realize. There are a few different special circumstances surrounding a divorce for senior citizens specifically. These circumstances may not change your decision, but you'll certainly want to plan for them rather than being blindsided after the fact!

Social Security

Many people wonder if they will still be able to receive social security benefits based on their former spouse's work record. The answer to that question, in many cases, is yes. According to the Social Security Website, to remain eligible:

• The former spouse must still be receiving benefits themselves
• You must have been married to each other for at least 10 years
• You may not remarry and still receive their benefits 

If your former spouse is age 62 or older, but not yet collecting benefits, you may apply to receive benefits on their work record. You can do so as long as you are aged 62 or older and have been divorced (and single) for at least two years prior to application.

Wills

Another common worry is having to edit an existing will to remove a divorced spouse as the beneficiary. The good news is that unless your will specifically states otherwise, the divorce (or termination of a domestic partnership) automatically revokes any provisions in the will naming your ex-partner as a beneficiary, executor, trustee, conservator, or guardian. This means that you will not have to go to the trouble of editing your will unless you wish for your spouse to remain named as one of these roles. 

You could also specifically outline your wishes in the event of the divorce during the original drafting. It is also important to note that life insurance policies and retirement accounts do not automatically update after a divorce and will have to be changed manually.

Taxes

You may be accustomed to filing your taxes as a "married-filing jointly" couple, but that status and the financial breaks it brings will end with the marriage. In the majority of cases, filing as single will result in a higher tax rate than filing jointly, and there is usually not a way around that. Complications can also arise from the process of dividing retirement accounts between the two of you. However, a Qualified Domestic Relations Order (QDRO), when performed by a professional, is designed to minimize tax penalties. Of course, you should talk to a qualified financial advisor about your specific situation, but be prepared to bite the bullet at tax time. 

Health Insurance

Attempting to obtain health insurance later in life can be a difficult thing. If you were previously covered under a spouse or a family insurance plan, but are still under the age of 65, you may face a gap in coverage until you become eligible for Medicare. If going without insurance for that long is not feasible in your situation financially or otherwise, you may consider delaying divorce or even opting for a legal separation instead until you come of age.

While some laws differ by state, there are a few things you'll want to consider and talk over with your attorney before committing to a divorce. However, as you can see, you have a few things to think about financially in terms of a divorce. 

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