Skyrocketing Divorce Statistics
According to a recent study conducted by the Pew Research Center on divorce rates in the United States, divorce rates among people aged 50 and over are skyrocketing. Specifically, this study found that the divorce rate for Americans aged 50 and over has doubled since 1990. For Americans aged 65 and over, the same study found that the divorce rate has tripled since 1990. While there is no one factor that has single handedly contributed to the rise in divorce rates among older couples in the United States, certainly one reason for higher divorce rates is that the practice of divorce is becoming more socially acceptable. Because divorce no longer has the stigma it once had, divorce can be used as a vehicle to allow couples who have been unhappy with one another for years to experience happiness again, either with someone else or as a single person. With that being said, however, it is important that you consider the financial consequences that going through a divorce later in life may have on you before you get divorced. Perhaps the best step you can take before getting a divorce is to consult with an experienced divorce attorney, who can explain how the division of the marital debts and assets may impact you financially.
Understanding Equitable Distribution
In New Jersey, marital debts and assets are divided among the divorcing couple through a process called equitable distribution. Contrary to what the name may suggest, equitable distribution does not mean that the martial debts and assets are divided equally on a 50-50 basis between the couple. Rather, marital debts and assets will be divided by a judge between the couple after the judge analyzes certain factors to determine what is “fair.” These factors are as follows:
- Duration of the marriage
- Age, physical and emotional health of the parties
- Income or property brought to the marriage by each party
- Standard of living during the marriage
- Any written agreement made by the parties before or during the marriage concerning an arrangement of property division
- Economic circumstances of each party at the time the division of property becomes effective
- The income and earning capacity of each party, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children, and the time and expense necessary to acquire sufficient education or training to enable the party to become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage
- Contribution by each party to the education, training or earning power of the other
- Contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker
- The tax consequences of the proposed distribution to each party
- Present value of the property
- The need of a parent who has physical custody of a child to own or occupy the marital residence and to use or own the household effects
- The debts and liabilities of the parties
- The need for creation, now or in the future, of a trust fund to secure reasonably foreseeable medical or educational costs for a spouse or children
- The extent to which a party deferred achieving their career goals
- Any other factor which the court may deem relevant
Of course, couples undergoing a divorce may bypass the process of allowing a judge to equitably divide the marital debts and assets by entering into a marital settlement agreement. However, regardless of whether the couple has a judge divide the marital property or the couple enters into a marital settlement agreement, older couples particularly have to consider the effect that division of certain marital debts and assets will impact them financially.
Marital Assets to Pay Particular Attention to When Undergoing a Divorce Later in Life
Because older couples who decide to get divorced have generally reached the age of retirement at the time they are divorcing, they typically have little to no additional earning potential after the divorce is finalized. This means that the only money older couples have to sustain themselves for the rest of their lives are the marital assets they jointly own with their soon-to-be ex-spouse. For this reason, it is important to pay particular attention to the marital assets that will continue to generate income when undergoing a divorce. These assets include rights to any pension plans or retirement accounts, interest-bearing checking accounts, stock options, and any real estate interests the couple owns.
Specifically, regarding pension plans and retirement accounts, a common misconception all couples have is that the money in those accounts are owned as individual property of the spouse that earned the money in the accounts. This is not the case. According to New Jersey law, if one of the spouses worked during the marriage and acquired a pension plan or put money into a retirement account, then this asset is considered a marital assets and may be divided among the spouses equally for the years that the couple was married and money was going into said pension or retirement account. This is important to know for the breadwinning spouse in a divorce because it affects his or her perception of the amount of money he or she is entitled to after the divorce. However, it is important to know for the non-breadwinning spouse too because knowing this fact can prevent this spouse from unknowingly giving up their right to the money in said retirement accounts in a marital settlement agreement.
Alimony for Older Couples
If the couple accrued much wealth during the marriage and this wealth is attributable only to the work of one of the spouses, then a judge may award alimony to the non-earning spouse in any divorce case in New Jersey. Alimony is are court-ordered payments to the non-breadwinning spouse after a divorce is finalized that are supposed to provide that spouse with the same standard of living he or she was accustomed to during the marriage. However, the judge is not obligated to award any alimony. If a judge does order an award of alimony, the spouse receiving the alimony will stop receiving alimony payments if the judge only makes the award temporary or if the spouse remarries or starts living with a significant other.
When older couples are divorcing, an award of alimony can have a significant impact on each individual spouse’s quality of life because the couples are generally no longer generating active income. Moreover, because the couple is older at the time of the divorce, they may be less likely to remarry or living with a significant other, which would trigger the end of an alimony payment obligation for the payor spouse. Consequently, for the payor spouse, alimony payments could place a substantial financial burden on him or her for the rest of his or her life. Conversely, for the payee spouse, alimony payments may be the only way he or she would be able to sustain himself or herself for the rest of his or her life.
Contact a Moorestown Family Law Attorney for a Consultation About Divorce in New Jersey Today
If you are thinking about filing for divorce, or if you have already started the divorce process and are dealing with another matter such as child custody, child support, or division of assets, you need to speak with a qualified attorney. The New Jersey family law attorneys at Cordry Hartman, LLC represent clients throughout the state, including Moorestown, Burlington, Camden, and Cherry Hill. We understand how challenging this time can be for you, which is why we will fight hard to protect your interests, and the interests of your loved ones, throughout the legal process. Call us at (856) 235-4511 or fill out our confidential contact form to schedule a consultation. We have an office conveniently located at 505 S. Lenola Road, Suite 224, Moorestown, NJ 08057.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.