Advice needed regarding Senior Divorce

[Lucyof3]

What is the name of your state? Louisiana....

My father is contemplating a divorce and I'm a bit worried for him. I'm hoping someone here might be able to shed a bit of light on the situation.

My father has been married to his wife for 25 years. He is 60 and she will soon be 67. My father took early retirement, but does work as a consultant. He doesn't work ALL the time, but periodically. His wife doesn't work, nor has she for 19 years.

I understand that LA is a community property state, so the assets will be split 50/50. My questions concern my father's potential earnings from now until the age of 65 AND his retirement account from his former employer and how that all figures into the settlement equation. Here goes:

1) Will he have to pay alimony? If so, how will that be figured considering that they are both retired for all intents and purposes? Is there a formula that I could use for the state of LA?

2) How will his retirement account from his previous employer be handled? Is that considered "community property" or not?

3) In regard to the family home, how will that be settled? Can that be considered partial or full payment of "alimony" if it is awarded?

4) Can alimony in LA be paid in a lump sum?

If any of you have ANY advice I can give my father, it would be greatly appreciated. Divorce after retirement seems to be a bit of a quagmire with little to no information available that I have found on line.

Thanks!

 

[Bali Hai]

What is the name of your state? Louisiana....

My father is contemplating a divorce and I'm a bit worried for him. I'm hoping someone here might be able to shed a bit of light on the situation.

My father has been married to his wife for 25 years. He is 60 and she will soon be 67. My father took early retirement, but does work as a consultant. He doesn't work ALL the time, but periodically. His wife doesn't work, nor has she for 19 years.

I understand that LA is a community property state, so the assets will be split 50/50. My questions concern my father's potential earnings from now until the age of 65 AND his retirement account from his former employer and how that all figures into the settlement equation. Here goes:

1) Will he have to pay alimony? If so, how will that be figured considering that they are both retired for all intents and purposes? Is there a formula that I could use for the state of LA?

It is a very very strong possibility your father wil be ordered to pay alimony. The judge will order alimony based on numerous factors and the amount cannot be predicted.

2) How will his retirement account from his previous employer be handled? Is that considered "community property" or not?

His wife is entitled to a portion of his retirement account based on the duration of the marriage.

3) In regard to the family home, how will that be settled? Can that be considered partial or full payment of "alimony" if it is awarded?

No.

4) Can alimony in LA be paid in a lump sum?

I'm sure it can if your father and his wife wants to do it that way. But the tax liability for his wife would be outrageous and the judge will likely not allow that to happen.

If any of you have ANY advice I can give my father, it would be greatly appreciated. Divorce after retirement seems to be a bit of a quagmire with little to no information available that I have found on line.

Thanks!

My advice to your father is to look at the family history of his wife, ie. life expectancy, health issues and decide if he might be better off waiting it out.

 

[fairisfair]

My advice to your father is to look at the family history of his wife, ie. life expectancy, health issues and decide if he might be better off waiting it out.

that was the nicest possible way of saying that. I must say, it cracked me up!!!

 

[Lucyof3]

I just spit coke on my screen! But, more to the point, the more bitter they are the longer they live, at least that's been my experience.

But, on to a more concrete question: What about my father's periodic employment? How will that be treated? Will that be the only basis for alimony, if all other assets are split 50/50 including his retirement, which won't be available until he reaches 62.5 years? OR, will they split everything 50/50 and my father will have to have money materialize out of thin air to pay alimony even though he's not "regularly" employed? (early retirement)

So confusing. Thanks for all thoughts!

 

[LdiJ]

I just spit coke on my screen! But, more to the point, the more bitter they are the longer they live, at least that's been my experience.

But, on to a more concrete question: What about my father's periodic employment? How will that be treated? Will that be the only basis for alimony, if all other assets are split 50/50 including his retirement, which won't be available until he reaches 62.5 years? OR, will they split everything 50/50 and my father will have to have money materialize out of thin air to pay alimony even though he's not "regularly" employed? (early retirement)

So confusing. Thanks for all thoughts!

All of the assets, including retirement assets (except social security) are going to have to be split 50/50 based on what accrued during the marriage. Depending upon the nature and the quantity of the assets, particularly the retirement assets, its possible that there would be no alimony ordered....or only minimal alimony based on his current earnings.

If his retirement account is a 401k, then it will be able to be split via a QDRO (Qualified Domestic Relations Order) into two different retirement accounts, one for him and one for your mother. Since she is of full retirement age she would then be able to begin drawing retirement from her account.

If his retirement account is not a 401k, or is not divisible via a QDRO, then alimony would be more likely.

Obviously, since your mother is 67 and has been out of the workforce for 19 years, its unrealistic that she would be able to work full time to support herself. Therefore, one way or another she will have to be provided for. If they have significant assets to divide, and her half can be carefully invested, that would help provide for her.

 

[nextwife]

Does she not have any retirement/social security income of her own?

Based on the ages, they got married when she was already 42. She had at least 15-20 years before dad came along to acquire retirement assets and credits before dad. What would she have done at 67 if she HADN'T found dad and married him?. He should not have to bear all the financial responsibility for what she failed to do before they ever married. And, she stopped working at about 48! So, she certainly had working years to save for retirement.

First, they should only split those assets that accrued DURING the marriage. Dad's PREMARITAL 401K accrual should NOT be split. Whatever he had saved/accrued when they married should be deducted from assets split. Same with hers. So non-comingled real estate, securities, savings etc.they may have that PRECEEDED the marriage should not be split at all.

Dad should also have her Social Security counted as income to her in looking at income disparites. Because it IS income to her and a REASON she is not working.

 

[Lucyof3]

Just to clarify, my father's wife is not my mother. I'm really only interested in protecting him from HER, and making sure that he doesn't agree to an unfair settlement, since he is a very "path of least resistance" kind of person. Basically, he wants OUT and is already planning on giving her whatever she wants just to be finished and get on with the business of his life.

So, the assets do include all of the 401k, Roth IRAs, stock portfolios, and his retirement. I figured as much. BUT, assuming that my father does continue to consult, she'd only be able to get 1/3, not 1/2 as alimony after a legal separation...right? I believe that is what I read in the LA Civil Code.

I know I sound like a meddling daughter, but, I can't help it, he's my dad.

Thanks for the replies!

 

[fairisfair]

Does she not have any retirement/social security income of her own?

Based on the ages, they got married when she was already 42. She had at least 15-20 years before dad came along to acquire retirement assets and credits before dad. What would she have done at 67 if she HADN'T found dad and married him?. He should not have to bear all the financial responsibility for what she failed to do before they ever married. And, she stopped working at about 48! So, she certainly had working years to save for retirement.

First, they should only split those assets that accrued DURING the marriage. Dad's PREMARITAL 401K accrual should NOT be split. Whatever he had saved/accrued when they married should be deducted from assets split. Same with hers. So non-comingled real estate, securities, savings etc.they may have that PRECEEDED the marriage should not be split at all.

Dad should also have her Social Security counted as income to her in looking at income disparites. Because it IS income to her and a REASON she is not working.

All Excellent points. Perhaps we will not all need to just sit and wait for the reaper!!! LOL

 

[fairisfair]

Just to clarify, my father's wife is not my mother. I'm really only interested in protecting him from HER, and making sure that he doesn't agree to an unfair settlement, since he is a very "path of least resistance" kind of person. Basically, he wants OUT and is already planning on giving her whatever she wants just to be finished and get on with the business of his life.

So, the assets do include all of the 401k, Roth IRAs, stock portfolios, and his retirement. I figured as much. BUT, assuming that my father does continue to consult, she'd only be able to get 1/3, not 1/2 as alimony after a legal separation...right? I believe that is what I read in the LA Civil Code.

I know I sound like a meddling daughter, but, I can't help it, he's my dad.

Thanks for the replies!

Ah, meddle away, you seem like a nice enough daughter. I think most of us got the fact when you referred to her as "his wife" that she was not your mother. She would only be able to get a portion of those assets which accrued during the marriage. For example lets say when they got married there was 50,000 in the 401K, and the 401K is now worth 76,000, she is only entitled to her share of the 26,000 difference, not the total value of the account. Let's say he owned the marital home, and it has increased in value by x amount. she is only entitled to a portion of the increase in value, not the entire value of the home. Your dad needs to seek his own legal representation and remember that although he wants out, he wants out alive. The ramifications of divorce can last forever, Just ask Bali!!!

 

[Lucyof3]

You guys have made me laugh! Thanks!

She came into the marriage with nothing. Not a red cent as far as I know. My dad had bought a home, fully remodeled it, etc. I'm not sure about any savings, 401k, or retirement prior to their (unholy) union, though. Very good point. I'll have to whisper in the ear of his confidant who will then share the news. I feel like a Russian Spy with all this subterfuge.

 

[LdiJ]

Does she not have any retirement/social security income of her own?

Based on the ages, they got married when she was already 42. She had at least 15-20 years before dad came along to acquire retirement assets and credits before dad. What would she have done at 67 if she HADN'T found dad and married him?. He should not have to bear all the financial responsibility for what she failed to do before they ever married. And, she stopped working at about 48! So, she certainly had working years to save for retirement.

First, they should only split those assets that accrued DURING the marriage. Dad's PREMARITAL 401K accrual should NOT be split. Whatever he had saved/accrued when they married should be deducted from assets split. Same with hers. So non-comingled real estate, securities, savings etc.they may have that PRECEEDED the marriage should not be split at all.

Dad should also have her Social Security counted as income to her in looking at income disparites. Because it IS income to her and a REASON she is not working.

And dad was only 35 when they got married, which means its not all that likely that he amassed a ton of assets ahead of the marriage, nor is it very likely that they were not co-mingled during the last 25 years.

Yes, of course her SS should be included when determining alimony, as well as a whole host of other factors.

However....nothing can bring the last 19 years back.

I will digress for a moment and give a purely personal opinion. This is a marriage that should NOT be ending. Financially, its in neither of their best interests, nor is it probably in their best interests emotionally either. They have 25 years of history and they are at the stage in their lives when they should be kicking back and relaxing, even if they don't spend much time together.

 

[fairisfair]

And dad was only 35 when they got married, which means its not all that likely that he amassed a ton of assets ahead of the marriage, nor is it very likely that they were not co-mingled during the last 25 years.

Yes, of course her SS should be included when determining alimony, as well as a whole host of other factors.

However....nothing can bring the last 19 years back.

I will digress for a moment and give a purely personal opinion. This is a marriage that should NOT be ending. Financially, its in neither of their best interests, nor is it probably in their best interests emotionally either. They have 25 years of history and they are at the stage in their lives when they should be kicking back and relaxing, even if they don't spend much time together.

Ew!!! and I totally disagree. They are both young, still young enough to enjoy what is left of their lives either alone or with another partner, and should definitely not be looking forward to another 25 with someone that they can't stand to be near. Financial schminacial (like that word?) that isn't everything, regardless of how much easier it might make poverty!!!