For the past 20 years, divorce rates for people over age 50 have steadily risen. Citing financial management reasons, addiction, infidelity, and more, “grey divorce” can cause seniors no small amount of stress.

An older spouse considering divorce likely has many questions about the legal consequences of their divorce. Splitting the property and assets of a decades-old joint estate can present a daunting task. How can older Americans protect these assets, specifically their retirement account?

Pension preservation guidelines

Spouses have a few options available to protect assets like retirement benefits. Most proper preparation comes from a thorough knowledge of marriage laws, both locally and federally, and one’s retirement plan.

  • State laws: The Commonwealth of Pennsylvania considers all property acquired and money earned during a marriage as marital property and is subject to division in divorce. Being an “equitable distribution” state, Pennsylvania courts will distribute property to couples in a way that it believes is fair. Equitable distribution means that a court won’t necessarily split a pension in half but will consider the value of the its payout when deciding what is fair. Generally, a spouse will keep any retirement accrued before getting married.
  • Pension plan details: All pension plans detail its payout method, whether as a one-time payment or monthly annuity. Single-life payouts will stop at death, but joint-life payouts can continue, specifically if the plan also offers survivor’s benefits. A lawyer can help sort through pension plan paperwork and locate the important details.
  • Offer something in exchange: Respectful and empathetic negotiations are the heart of equitable distribution. A retirement account is a personal asset and represents decades of work and dedication. Offering a spouse the share of an asset of equal value in exchange for waiving the rights to a retirement plan may work. Several spouses even purchase a life insurance policy equal in value to a spouse’s share of a pension plan. If both spouses have a retirement account, each may wish to keep their own, allowing for a mutually beneficial split.

Seek legal counsel for more options

Those preparing for a late-in-life divorce will face a considerable amount of dense paperwork, due to the size and age of the joint estate. Divorcing couples can find answers with a local attorney familiar with divorce laws and high-value property division.