America’s Rising Divorce Rate

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February 1, 2012

For the past decade, the national divorce rate has been dropping steadily with respect to the country’s population as a whole ( However, the number of silver divorces, those among couples over the age of 60, is actually increasing. As a result, a wide array of legal issues are taking on greater importance in today’s cases – for example, the matter of how to treat a retirement account in payout status.

The difficulty with a retirement account is that it looks like property, but talks like income because it produces a reliable, definable amount of money on a regular basis. The question then becomes, are such accounts assets to be dealt with in the property division or income to be dealt with in the support determination?

“The number of silver divorces, those among couples over the age of 60, is actually increasing.”

Realizing that these types of cases will not be going away anytime soon, the Court has recently made great effort to provide a clear answer. The recent Oregon Court of Appeals case of Rushby and Rushby held that a retirement account in payout status should be treated as an asset, not as income. The key is that the income the account generates, like any asset, may be relevant in establishing support determinations.

So what does all of this mean for you? The Rushby case is of particular importance for individuals in a long-term marriage whose spouse holds the retirement account. Receiving a piece of the account itself, as opposed to a support award based on it, ultimately leads to a higher award for such a spouse. Additionally, receiving the actual account allows the recipient to be in charge of his or her own destiny, instead of relying on their ex-spouse to make payments each month. It is no coincidence that the victorious spouse in the Rushby case was trying to vacate her support award in favor of a piece of the actual retirement account.

Retirement account-controlling spouses also must pay careful attention to how the Court treats these sorts of cases. To avoid their soon- to-be ex-partner attempting to take two bites of the same apple, this spouse should argue that the re-channeled income generated by the retirement account division should be considered in determining the levels of support. This argument could lower or even eliminate the award.

With the baby boomer generation entering into retirement and the silver divorce rate already on the rise, it’s crucial to understand the position the Court will take when navigating this new territory.