retiring before divorce raises red flag
Posted on April 10, 2016
Retiring before divorce raises red flag. (Part 5 of 5)
Q. I’m a citizen of England. Before I got married, I acquired a substantial amount of property through both my hard work and inheritance. I married an American woman. We jointly own a home on Nantucket in which we now live about half the year. We have other assets in the USA. The other half the year we live in the U.K.
Our 30-year marriage is at an end. The questions are: Should I file for divorce in Massachusetts or in England? Should I stop working and let the Executive VP take over the company?
A. Social Security and the Massachusetts alimony law say your normal retirement age is 65 ½.
So what would you think if you were the judge and saw that you retired at age 60, just before you filed for divorce? Or saw you filed for divorce and then retired? Don’t waste your money paying your lawyer to try to prove what the judge won’t buy.
Assume you voluntarily reduced your income by retiring, taking a lower-paying job, or deciding to sell watermelons from a cart in Haymarket Square. The court will impute income by finding you could have still been earning now what you earned before. And that assumed number will be the basis on which the court sets the amount of alimony you’ll pay.
Based on the limited facts you provided, you should stay at your current job and file for divorce in Massachusetts – not in England. If you file and serve her here before she files in England, she’ll not be able to ask an English court to award her lump-sum alimony. In Massachusetts you’ll probably equally divide marital assets and your alimony will be about 33 percent of your income, up to what it actually will cost your wife to maintain her current lifestyle.
Whether your wife gets half, a smaller percent, or no part of your inheritance depends on the amount you inherited, the current value of that inheritance, if you did or did not use income or principal from your inheritance to live on, and the value of all your other assets.
When you attain age 65 ½ your alimony will stop unless your ex-wife can prove, by clear and convincing evidence, she still needs alimony. However, if she walks away now with substantial assets, after you reach 65 ½, she should have enough money and income to pay her own way.
If you ever again marry, it must only be after you’ve signed a bullet-proof premarital agreement that says you and your new spouse keep your separate property and there will be no alimony. Then never let your new wife use your money to buy anything that is put in joint names.
Last, remember this, you don’t have to marry someone you
live with. So, even though it is not good for my
business, after you get divorced, never again say these
words: “Will you marry me?”