Over 50+ Years Old and Headed into A GRAY DIVORCE?

June 12th, 2014

There has been an overall decrease in the United States divorce rate since 1990, but the divorce over age 50 has doubled! “One out of three boomers will face old age unmarried” says the National Center for Family & Marriage Research at Bowling Green State University.

What are the main reasons for “The Gray Divorce Revolution”? 1. Lack of communication between spouses, 2. Financial hardships affecting a couple, 3. Empty nests and the lack of “stay together for the family” and 4. Lack of commitment to the marriage with less social stigma about splitting up and divorce.

In today’s economy, Baby Boomers are very vulnerable financially. In divorce assets are split leaving each spouse with less time and existing assets or funds necessary to recover from financial losses, existing debt and funds to secure retirement.

A very disturbing fact: the Employee Benefit Research Institute 2011 Retirement Confidence Survey states that more than half of all workers and their spouses have less than $25,000 in household savings and investments.

What are the main areas in which “The Gray Divorce” couples are looking at financial challenges in their new single state?

Retirement-Saving for retirement is not what it used to be. Most couples usually split up their retirement fund, but in a declining economy saved funds have been hard hit and there is insufficient money to retire in their current or accustomed lifestyle. Many divorced people are now postponing retirement by remaining in or trying to return to the workforce. It can be very difficult to re-enter the workforce with a much lower paying job as your only choice.

Social Security- If you are over 62, were married over 10 years to your former spouse and are currently unmarried and not entitled to receive a higher benefit based on your own work, you can receive benefits based on your ex’s earnings even if your former spouse has remarried.

The longer you can wait to collect divorced spousal benefits, preferably up to your full retirement age, the higher your benefits will be.

Make sure you obtain a copy of your spouse’s most recent Social Security statement when divorcing to have an idea what your benefits will be at retirement.

Housing- Breaking up the household and marital assets is usually the most emotionally draining part of any divorce. Who gets the house? A better question maybe who can afford the House? Many couples are very emotionally drawn to keeping their home even though it could be the difference between supporting a more streamlined lifestyle or a potential bankruptcy! Think with your brain and not your heart. You are starting a new phase in your life. What will make you secure and is truly affordable in your new financial situation?

Marital Debt- Debts incurred jointly in a marriage will remain the obligation of both parties after the divorce from the creditor’s position. If your former spouse is responsible for a debt but doesn’t pay it your credit can be severely damaged. If a debt was legally incurred exclusively by an individual spouse during a marriage in most cases it will be the responsibility of that individual. Make sure all joint credit cards are cancelled immediately and start building your own credit.

It is very important in “a gray divorce” that these debts are dealt with in a timely fashion since most spouses will soon be on a fixed income and may not be able to afford the financial stress of these liabilities.

Health Insurance- This is one of the most perplexing problems that ex-spouses face between the ages of 55-65 years old. If both spouses work and have separate health insurance policies there is not a problem. But if one spouse is self-employed or unemployed this could be a very big issue. COBRA insurance is usually available through your ex- spouse employer for 36 months after a divorce. This is usually a viable option but it is a more expensive option and you should move to an individual health insurance policy as soon as you are able.

“A Gray Divorce” is a very sobering experience for older Americans. Many will never be able to recuperate from the financial ramifications of the divorce. Don’t kid yourself. Your financial situation has definitely changed. Reevaluate your financial portfolio and start cutting your expenses!

Facts About Divorce in Texas (How Long Will It Take to Get Divorced?)

February 16th, 2011

To file for a divorce in Texas, you must be a Texas Resident for 6 months, and you must have lived within the county you plan to file in for at least 90 days immediately prior to filing of your divorce petition.  Time spent by a Texas resident outside of Texas, while in the military, satisfies the residency requirement in Texas for a divorce.

Texas does not recognize legal separations. 

It is possible to get a divorce even though the other party does not want the divorce to take place.  Texas is a “no fault divorce state.” “No fault” means that one spouse does not have to prove the other spouse has done anything wrong in order to obtain a divorce. You cannot be held to a marriage because your spouse does not want to sign or refuses to participate in the divorce process.  The court will enter divorce orders even if the other party refuses to sign them.

Texas requires a minimum 60 day waiting period before any divorce can be finalized. The 60 day period begins to run from the time the Original Petition for Divorce is actually filed with the court.  In other words, the shortest time it will take to finalize a divorced in Texas is 61 days.  On occasion, in domestic violence cases, there is an exception to the 60 day rule.  If the parties are in agreement, a divorce proceeding can be finalized immediately following the sixty-day waiting period.  On average, however, the time period is more likely to run 90 to 120 days in an uncontested divorce due to the crowding of court dockets and the time necessary for counsel to draft necessary legal documents and obtain the agreement of both parties regarding the wording of the final documents.  If the parties are not in agreement, the time necessary to finalize the divorce will depend on the conduct of both parties and their attorneys, the court’s schedule, the matters in controversy and the complexity of the contested issues. From start to finish, the divorce process may go through a number of phases which might include temporary orders, exchange of financial information, psychological evaluations (in custody cases), alternative dispute resolution, trial, and appeal. A divorce in which the parties are deeply in opposition to an agreement on some or all of the core issues may take anywhere from several months to several years to complete.

As to the division of marital assets, Texas is a community property state.  For more information on community and separate property, see our blog, Divorce:  What is separate property and what is community property.

It is important to remember that, although the statutory waiting period to finalize a divorced is 60 days, it is more likely than not that your divorce will “not” be finalized on the 61st day following the filing of your petition for divorce.

My Divorce is Costing Me What? Why is This Divorce Costing So Much?

February 15th, 2011

Financial costs of divorce may often be significant. Divorce lawyers, like any other professionals, are paid according to their skill, training and experience. In Texas, one can expect to pay an advance deposit from $2,500 to $25,000 depending on the complexity of the legal issues involved, as well as the quality and expertise of counsel selected. In addition to the legal fees, some cases require “expert testimony” regarding the value of certain significant assets, i.e. business interests, the marital residence, rental properties, art work and more.

One reason most experienced divorce lawyers want a substantial retainer is that once an attorney files an appearance, they are charged with duties in their role as an officer of the court. Under law and court procedure an attorney must make appearances and file specific legal documents with little or no discretion depending on the opponent’s conduct. Initial filings and other documents may appear deceptively simple, but can challenge even the most patient person. The devil truly is in the details, especially where haggling parties look for disagreement. Even minor issues can blow up, and evolve into unnecessary expense.

Divorces involve complicated issues and many times it is necessary to have a temporary hearing sooner rather than later to sort out legal and monetary issues for the pendency of the divorce proceeding.  Who will continue living in the home?  Who will make mortgage payments?  Who will make payments on automobiles?   Who will pay certain credit cards?  Who will pay utilities?  Who will maintain the property?  Who will be responsible for the debts?  All questions must be carefully considered and weighed out.

In divorces with child related issues there are more complicated factors to be considered.  Who will receive primary custody of the children? Where will the children live and how often?  What school will the children attend?  How will their education be paid?  How much child support will be paid? What visitation schedule will work for the parents and the children?  How, when and where will the child exchange take place?  Which parent will maintain health insurance?  Will the child’s residence be restricted to a particular geographical area? 

In all cases, marital assets must be divided; and even if there are few marital assets and only marital debt, there remains much to fight about, or resolve.

The state of Texas makes it unethical for lawyers to take a divorce action on a “contingency fee” basis. That leaves only two ways for a divorce lawyer to be paid: by the hour, which is the most common; or on a flat fee basis. Hourly fees in the Dallas/Ft. Worth metroplex area for a divorce lawyer range anywhere from $250 per hour to $550 per hour and up, depending on your choice.

In the cases where one party has a distinct financial advantage, the economically disadvantaged party can apply for temporary attorney fees and costs to be paid immediately by the party in control of the resources provided a fund is available for such use. In a proper case, such temporary motions often are granted by the trial court in order to level the playing field.

After every hearing, whether it concerns child related issues, marital assets, debts of the parties, or property owned by the parties, an order must be drawn by counsel based on either the court’s decision or the agreement of the parties.  Many times these orders involve the drafting of further legal documents such as Deeds of Trust, Deeds of Trust to Secure Assumption; Special Warranty Deeds, and Real Estate Lien Notes relating to the parties home; Powers of Attorney to transfer title of automobiles; Wage Withholding Orders for the withholding of child support; and Austin forms (required by the Bureau of Vital Statistics in every divorce action).  Often a Qualified Domestic Relations Order (QDRO) is necessary to divide retirement plans, accounts, pensions and the like.  These are just a few of the necessary documents required in some divorce actions.

Bottom line is: the less the parties fight the less they will pay. Lingering animosities do not expedite resolution. Courts do not want to hear “he said/she said.” Whether that is right or wrong is for a social commentary, not a legal guide. That is why there are ‘irretrievable breakdown’ divorces.

Other factors that affect the cost of divorce are: whether the divorce is adversarial; how much you pay hourly for your legal counsel; if you and your spouse are battling over child custody issues involving children; the number of marital assets and debts you have to deal with; and whether your spouse’s attorney is unnecessarily aggressive and adversarial, without purpose.

When selecting a divorce lawyer know what you are looking for.  Your counsel should be a person in whom you can put your total trust — after all your emotional health, the emotional health of your child(ren) and potentially the emotional health of your grandchildren could be at issue. The way to keep divorce costs under control is to select the right lawyer and to force your intellect to overrule your emotions when making decisions.

Serving clients throughout Texas, including Collin, Dallas, Denton, Ellis, Grayson, Kaufman, Rockwall and Tarrant counties and the communities of Addison, Allen, Arlington, Carrollton, Dallas, Fort Worth, Frisco, Garland, Grapevine, Highland Park, McKinney, Mesquite, Plano, Richardson, Rowlett and University Park, Murphy,Wylie, Lewisville, Flower Mound, Irving, along with surrounding DFW areas.