The rules and rhythms of divorce change when your children are grown. Divorce rights and divorce with kids are whole new subjects. Some things get easier, like working out time with the kids. To find out what's special about divorce for midliers, we consulted an expert, Seth Streeter, cofounder and president of Mission Wealth Management in Santa Barbara, California. Here are five things to consider if you're calling it quits.
#1 Custody, a big issue, is cut down to size. When you deal with divorce one of the main issues concerns custody of the children. When the kids are out of the house, living elsewhere, self-supporting, there's less of a focus on that. Which makes things a little easier. You'll still have to figure out whose home they'll visit over the holidays and during summer vacation. Here's Streeter's advice. "There needs to be sensitivity on the part of the parents. You don't want to pressure them. Work out an arrangement that has benefits for all." Unless there's college tuition to consider, there's no financial side. "What's important is for the kids to keep as much tradition as possible. I've seen examples where one parent has Chirstimas eve and Christmas morning, and th otther parent has the rest of Christmas day. The kids know they'll see both mom and dad every Christmas."
#2 The family home is no longer sacrosanct. "When kids are younger, the female often wants to stay in the family home to create contunity for the kids. When the kids are out of the nest, this becomes less important," Streeter points out. "Since the home is often the biggest financial asset, this frees up that money." If both husband and wife downsize their accommodations, and sell the family home, there's more cash flow to work with.
#3 Spousal support may wane. "At this stage, careers are peaking or maybe even winding down. Support is determined by earning potential. Typically, the higher wage earner might say I can't pay as much support," Streeter says. "The spouse who hasn't worked because he or she was raising the kids is expected to work part or full time. This could be a benefit to the higher wage earner." Even if the divorce happened years earlier, the alimony or support payer may make a case to lower payments for the same reason. Streeter says the rule of thumb in California for marriages under 10 years is half a year's alimony for each year of marriage. Beyond ten years, it's a negotiation.
#4 Child support is no longer an issue. Child support discontinues at 18 or 21, when kids are out of the nest, unless there's a special need situation. One less thing to figure out.
#5 Usually, there are additional assets to tap. Home equity may be available, and at age 59.5, you can start making withdrawals from retirement vehicles like IRAs and 401(k)s. A pension might kick in. "Another factor that's often ignored is a potential inheritance. That can provide comfort," says Streeter, who explains that retirement accounts can be split. "With IRAs, you can transfer a percentage of the plan to a spouse without taxation. You can split these accounts, no problem. We recommend each spouse have a portion – it's long-term security and it isn't liquid immediately."
Mission Wealth Management can give you more information on divorce rights, parents children and divorce and the financial consequences of divorce when the kids are out of the house.