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Anoka Divorce Law Blog

Planning for retirement after "gray divorce"

An increasing number of Americans in Minnesota and across the country are choosing to divorce at an older age. Often called "gray divorce," more people are divorcing over the age of 50 than at any time in the past. These divorces come with unique challenges, especially when they reflect the end of long marriages stretching over decades rather than shorter second or third marriages. In particular, people may be very concerned about how divorce will affect their retirement plans, given the limited amount of time remaining to compensate for the changes that can come with a financial divorce settlement.

The financial effects of divorce often persist long after the emotional and practical issues have been settled. When a gray divorce is involved, this often means restructuring one joint retirement plan into two separate plans. These financial concerns have not stopped the growth of gray divorce; the rate of divorce for people over 50 has doubled since 1990, and it has tripled for people 65 and older. While many gray divorces involve shorter second marriages, around half involve long-term partnerships with significant financial entanglements.

Fewer Americans getting divorced

Most married couples in Minnesota expect their nuptials to last for life. However, there are situations when divorce is probably the best option. Curiously, while Americans are generally accepting of the necessity of divorce and supportive of divorced people, divorce rates have largely decreased over the past few years.

These declines are not consistent across all age groups, however. The decreases have mainly been among younger couples. Analysts believe that this may be the result of a general trend of marrying later. These older couples often have a greater level of compatibility and financial stability, which can reduce conflicts.

Tips on how to successfully co-parent a teen

Minnesota parents who have been through a divorce, are living apart and are struggling to co-parent their teenaged child should consider several ways they could possibly improve their family situation. Successful co-parenting provides a teenager with stability and support -- two important factors that can help prevent risky behavior and experimentation.

Focusing on solid communication is one way exes can successfully co-parent. For example, divorced parents should always be in touch when it comes to a teen's friends. A parent shouldn't assume the other parent knows who is in the teenager's life, especially when it means neglecting to get to know the teen's friends. Peer pressure is a major factor in why a teenager might turn to risky behavior. Communicating about a teen's life can go a long way toward providing consistent guidance.

Property division in Minnesota is not black and white

You have decided to divorce your spouse, but you are worried about the financial fallout of this major life event. How can you be sure that you will be in the best position financially, following the marital breakup?

A particularly important aspect of divorce that will impact your financial situation long term is asset division. Here is a look at how Minnesota courts handle the division of marital property, and what your rights are in this area during your divorce proceeding.

How divorce affects Social Security benefits

For individuals in Minnesota eligible for Social Security, untying the knot doesn't necessarily mean no longer being able to collect on a spouse's record. If a marriage has lasted for 10 years or more and the former spouse is 62 or older and unmarried, they may be entitled to as much as half of an ex's full retirement amount or disability benefit. The other spouse's eligible payouts must also be higher than what the spouse seeking benefits is entitled to receive themselves.

A former spouse can also collect Social Security benefits on an ex-spouse's record even if that spouse has remarried. Also, if a former spouse has been divorced for at least two years, they may be able to collect on their ex's record even if they haven't yet applied for benefits. Eligibility for spousal benefits typically ends if the recipient spouse remarries, but they may be able to collect on their new spouse's record if they are eligible for distributions.

Changing gender roles and divorce

Some men expect to be the financial providers for their families. Therefore, when they make less than their wives, there may be trouble ahead for their relationships. Studies show that this is often true for married couples in Minnesota and throughout the U.S. In some cases, husbands who are not the breadwinners feel as if their wives have more control than they do. A perceived lack of control may be a blow to their egos.

It is becoming more common for wives to make more than the husbands in their lives. According to the Bureau of Labor Statistics, this is the case in 38% of marriages. The feeling that men need to be financially successful has lingered despite the fact that attitudes toward marriage and gender roles are changing. It has become more common for couples to marry for love as opposed to financial security.

How divorce can affect insurance covrage

Some divorcing couples in Minnesota have to-do lists that include such things as sorting out marital assets and handling any custody issues that may be part of the divorce process. During this stressful time, it's easy to overlook other matters, such as insurance coverage for the family. However, it's still important for separating spouses to be aware of how a change in marital status can affect insurance arrangements.

The insurance issues that often come into play during the end of a marriage usually involve health and life insurance. With health insurance, it's common for one spouse, usually the higher-earning one, to be covered by the other's plan they have through work. In order to make things easier post-divorce, the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows an individual to remain covered under their ex's plan for up to three years. The potential drawback for a lower-earning spouse without their own employer option is having to pay additional administrative fees, although Affordable Care Act plans may be more budget-friendly.

How to manage credit when a marriage ends

Getting a divorce will not automatically impact a person's credit score, and an individual's gender will not necessarily affect his or her credit score. However, there are ways in which divorce can negatively impact how lenders view a Minnesota resident. In some cases, one party will experience greater credit consequences than the other. When a couple is married, they will likely open joint accounts, such as a mortgage or an auto loan, that will appear on both of their credit reports.

After a couple gets divorced, the divorce decree may spell out how the debt is to be repaid. However, creditors are not required to follow the terms of a divorce decree. Therefore, if a joint debt is not repaid, each individual listed on the loan could experience negative consequences. It is often a good idea for divorced people to refinance joint debts or close joint accounts so that they cannot be used in the future.

Child support modifications and other considerations

When parents of minors get divorced, they may need to make child support arrangements. Like most states, Minnesota has a formula for determining child support that includes accounting for each parent's income, how many kids are involved and how much time the children spend with each parent.

However, even after child support is in place, it can still be modified when necessary. A court may approve a child support modification if one parent's income drops for reasons such as disability or unemployment. If there is spousal support, that will usually be lowered along with child support. A modification could also be approved if the noncustodial parent gets a significant increase in income.

Important things to do after getting divorced in Minnesota

A spouse who files for divorce may want to take the proper steps to ensure that legal documents are drawn up quickly. Prior to receiving a divorce decree, both parties must make various arrangements to divide their assets and make plans for future finances. The issue is more important if child support is a concern.

Married couples are often insured under the same medical insurance policies. In this common situation, the end of a marriage means that one spouse must have their own coverage. In addition, a recently divorced person needs to contact their insurance agent to remove the spouse from the policy. Changing the last name is another important issue, especially when dealing with government identification cards.

Marvin Law Office, L.L.C.

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Anoka, MN 55303

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