While the overall divorce rate is declining, the rate of divorce for older couples is increasing. Individuals in New York who are going through a later-in-life divorce, colloquially known as a “grey divorce,” may contend with unique challenges. In particular, older individuals may have more significant assets that are involved in a contested divorce, such as a home mortgage. However, these assets may also provide additional opportunities for older spouses.
A reverse mortgage is a financial tool that allows a person to receive monthly payments or a lump sum payment. It is only available to homeowners 62 years old or older and permits them to borrow on the equity in their home. The loan and accumulated interest are due when the homeowner breaks ties with the home by moving, selling the property, failing to pay property taxes or passing away, for instance. Homeowners can use the funds to repair their homes, make modifications, finance home health care, pay medical expenses or other reasons that the homeowner sees fit.
A reverse mortgage can have many implications for a divorcing spouse; being aware of this option to provide additional monthly income can help influence him or her to keep the house rather than agree to a higher amount of alimony or other agreement regarding the division of property. For individuals who have already divorced, using a reverse mortgage can help them avoid selling depressed investments that are likely to bounce back. Retirees may be able to avoid tax implications by using a reverse mortgage rather than liquidating investments.
New York family law lawyers may be able to provide assistance to individuals going through a divorce later in their life. They may be able to help facilitate a property division settlement that takes the person’s conditions in life into consideration.
Source: Forbes, “How Reverse Mortgages Can Benefit Older Divorcing Women“, Jeff Landers, September 24, 2013