• 31
  • March
    2011

Contrary to popular belief, a high divorce rate is not just confined to the younger generation of Americans. In fact, statistics from the National Center for Family & Marriage Research at Bowling Green State University show that the divorce rate among people age 50 and over - the baby boomer generation - has actually doubled over the last 20 years. This is significant because many divorcing older couples have accumulated sizeable assets over the years and will probably want to utilize certain asset protection strategies in the event of a divorce.

Today's post, the second in a series, will briefly examine some of these asset protection measures.

(Please see "Some important financial considerations for baby boomers - I" for additional information.)

Post continued ...

Understanding the value of spousal support and Social Security benefits

Many divorcing spouses end up relying upon monthly spousal support payments as either a supplemental income or as their sole income.

While this strategy may work well for younger couples, it can be potentially risky for baby boomers as serious - and potentially fatal - health issues are more likely to develop later in life.

Interestingly, many financial experts recommend that baby boomers receiving spousal support consider taking out their own life insurance policy on their former spouse to protect their financial interests.

Another important consideration for divorcing baby boomers is Social Security benefits.

According to the Social Security Administration (SSA), you are eligible for Social Security benefits based on your work record or the work record of your former spouse even if you have not held a job for many years or your former spouse has since remarried. This is significant because if your former spouse earned more than you, he or she will be entitled to more benefits.

However, in order to qualify for Social Security Benefits based on your former spouse's work record, your marriage must have lasted at least 10 years and your divorce must have been final for at least two years.

In addition:

  • You must be unmarried
  • You must be 62 or older
  • Your ex-spouse must be entitled to Social Security benefits

Social Security benefits are an important consideration that you will likely want to take into consideration during spousal support/financial negotiations with your former spouse.

Remembering your children

While custody battles between divorcing baby boomer couples are likely to be non-existent, it's still important to make sure no issues arise down the road. Financial experts recommend the execution of a lifetime asset protection trust to help ensure that your property passes to your children, not your former spouse's new husband/wife or your child's new spouse.

Stay tuned for more from our Denver divorce blog ...

If you would like to learn more about divorce or asset protection, you should strongly consider speaking with an experienced legal professional.

This post is provided for informational purposes only and is not to be construed as legal or financial advice.

Related Resources:

Divorce over 50: 3 mistakes to avoid (SmartMoney)