After decades of marriage, you have come to the realization that it is time to part ways. But understandably, you have concerns. Besides personal concerns, you also have financial concerns.
You want to know what is in store and whether you can somehow come as close as possible to your current lifestyle. But understand that you may be able to do so. Your first step, though, is to get a clear picture of your assets – marital and non-marital.
Home, retirement assets and health insurance
You are not the only person going through divorce later in life. Divorce rates for people aged 50 and older have doubled since the 1990s, according to the Pew Research Center. In addition, divorce numbers have nearly tripled among couples who are 65 and older.
Long ago, you imagined a safe and secure retirement with your spouse. However, since that will not happen, you must prepare. Here are some of the topics to address:
- The family home and additional real estate properties: If you accumulated these assets during your marriage, they are marital assets. Selling these assets and splitting the funds with your spouse is a likely scenario. Purchasing your former spouse’s share is a possibility so you can continue to live in your home. However, understand the long-term costs associated with living in the home as well as property taxes that must be paid.
- Retirement assets: This includes IRAs, 401(k)s and pensions, which in most cases all or a solid portion are marital assets. Through the years, you and your spouse likely accumulated a large retirement portfolio. In working with an attorney, make sure that you secure your fair share of these assets. Also, understand that this nest egg – originally designed for a single household – likely will be split. You will have to make some financial adjustments.
- The possibility of hidden assets: Spouses are not always honest with each other. This may include hiding assets – marital assets – from the other. Uncovering them may be a challenge but start by reviewing tax returns. A forensic accountant may help.
- Alimony: In examining your future financial needs, understand that alimony can help you maintain a lifestyle close to what you are accustomed. Maybe you gave up a lucrative career to stay home and raise your children while your spouse worked.
- Seek health insurance: Health care coverage is essential. It may be more expensive now, but you can have this become part of the discussion during divorce negotiations.
Understanding the financial issues in divorce is important, and so is determining your needs.
Preparation and knowledge
A late-in-life divorce may prove traumatic for some, especially on the financial front. Preparation and knowledge are crucial for a successful transition. An experienced family law attorney can provide beneficial insight.