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Lori Loughlin filed for divorce from Mossimo Giannulli on Sept. 4 in Los Angeles Superior Court, citing irreconcilable differences. (1)
The couple married on Nov. 27, 1997, and separated on Aug. 31, 2025, after 27 years and nine months of marriage, Good Morning America reported. (1)
According to Fox News, Loughlin, 62, confirmed their assets and debts as separate property under a prenuptial agreement signed in October 1997, and asked that spousal support be reserved “for future determination.” (2)
In other words, a prenup is doing a lot of the work in their divorce. If you’re splitting up later in life without one, the money questions are harder, and you have fewer working years to recover from mistakes.
I’ve been a CPA since 1981, and the rules on Social Security, retirement accounts, alimony and the family home all change when a long marriage ends. (3)(4)(5) Here are 5 money traps to watch for in a divorce after 60.
1. Don’t walk away from Social Security on your ex’s record
You may be able to collect benefits on an ex-spouse’s work record if your marriage lasted 10 years or longer, you’re unmarried and you’re 62 or older, among other conditions, according to the Social Security Administration. (3)
A spouse’s benefit can be up to half of the amount the worker is entitled to receive at full retirement age. (3)
Loughlin and Giannulli were married far longer than 10 years. If your marriage is anywhere near that line, check the rules with Social Security before you sign anything.
2. Split retirement accounts the right way
A 401(k) or other workplace plan can be divided with a court order called a qualified domestic relations order, or QDRO. Under one, the IRS says, “your ex-spouse may become entitled to a portion of your account balance.” (5)
Payments to an ex-spouse under a QDRO are an exception to the 10% additional tax on early distributions from workplace plans. That exception doesn’t apply to IRAs. (4)
IRAs work differently. The IRS says you can transfer assets from your IRA into your spouse’s IRA tax-free under a divorce or separate maintenance decree, through a trustee-to-trustee transfer. (5)
My advice: don’t cash out an IRA and hand over a check to settle up. Ask for a direct transfer, and get the paperwork right.
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3. Alimony isn’t taxed the way it used to be
If your divorce agreement was signed in 2019 or later, alimony payments aren’t deductible by the spouse who pays them and aren’t included in the receiving spouse’s income. (5)(6)
That changes the math in a negotiation. Under the old rules, the payer got a deduction. Under a 2019-or-later agreement, every dollar of alimony comes out of after-tax money.
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4. The tax break on your house can shrink
When you sell your main home, you may be able to exclude up to $250,000 of gain from your income, or up to $500,000 if you file a joint return with your spouse. (7)
To qualify, you generally must have owned and used the home as your residence for at least two of the five years before the sale. (7)
Your filing status generally depends on whether you’re married or unmarried on the last day of the year. (5) So if one of you keeps a house that’s gone up a lot in value and sells it later as a single filer, the exclusion may top out at $250,000.
The good news: the IRS says there’s usually no recognized gain or loss when property is transferred between spouses or former spouses. (5) It’s the later sale that can sting.
5. Update every beneficiary and every power of attorney
Don’t count on a divorce decree to rewrite your paperwork for you. Check the beneficiary on every retirement account and life insurance policy. Then redo your will, your financial power of attorney and your health care directive, so an ex isn’t the one making decisions for you.
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My honest take
Loughlin’s divorce has one feature that matters: a prenup signed in 1997 already spells out what’s separate. Without one, couples often end up fighting over the house, the retirement accounts and support.
If you’re facing a divorce after 60, slow down. Run the Social Security numbers, figure the taxes before you agree to a split, and don’t trade a retirement account for a house you can’t afford to keep.
You can rebuild a life at any age. Rebuilding a retirement fund is a lot harder.
Sources: 1. Good Morning America; 2. Fox News; 3. Social Security Administration; 4. IRS; 5. IRS; 6. IRS; 7. IRS
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