While many couples in Illinois who choose to get a divorce experience financial strain, couples who divorce late in life must pay attention to specific financial concerns. If you choose a late-in-life divorce, you need to take steps to protect your assets.
Real estate
Illinois operates under the equitable division of property. This means that the courts will not divide property 50/50 in a divorce. However, if you purchased the property during the marriage, the courts will split the property’s value. In most cases, this requires you to sell the family home. If you wish to remain in the home, you will need to pay the other spouse for their financial interest in the home.
Retirement accounts
Late-in-life divorces, also known as gray divorces, will significantly affect your retirement and pension accounts. Courts typically believe that both parties contributed to the accounts. Under equitable distribution, both parties must split these assets.
Important facts to keep in mind about retirement accounts include:
• Your retirement savings will now need to cover two households instead of one.
• Applicable accounts include Health Savings Accounts, IRAs, and 401ks.
• If both couples have a retirement account, they can reach an agreement outside of court to keep their own so that neither side has to split their retirement savings.
Social Security benefits
The length of your marriage determines whether or not you can claim your spouse’s Social Security benefits. If you have been married for at least ten years, you could file a claim on your spouse’s work record as long as you meet the following requirements:
• You remain unmarried.
• You are at least 62.
• Your former spouse receives Social Security benefits.
• Your spouse receives higher benefits than you.
Although obtaining a divorce later in life can disrupt your financial goals, you can rebuild after your divorce. A gray divorce does not have to ruin your finances for the rest of your life.
