Four financial concerns to look out for during a gray divorce
Key steps can prevent a gray divorce from turning needlessly messy
Gray divorce is a growing trend in family law, with as many as a quarter of all divorces now involving a spouse who is over 50 years of ago, according to Time. Divorcing later in life brings with it a unique set of challenges, not least of which is the concern over what financial repercussions a divorce will have on a person’s retirement plans. As a result, property division tends to take a central role in many gray divorces and ensuring that a spouse gets his or her fair share of the marital estate is often key to enjoying a comfortable retirement.
Retirement benefits and insurance
By far the most important assets for many older couples are the pensions and other retirement funds. These assets, which can often prove even more valuable than a couple’s home, are subject to unique laws and regulations during the divorce process. Retirement funds can usually be divided between both divorcing spouses, according to USA Today, but they usually require what is called a Qualified Domestic Relations Orders (QDRO). A QDRO can help ensure people get their fair share of a retirement fund without paying unnecessarily high taxes or transfer fees.
Health insurance can be just as important as a pension during retirement, yet insurance tends to take a backseat in many divorce cases. Holding on to a health insurance plan can pay dividends in the future, however, especially considering the fact that it gets more difficult to qualify for the most affordable plans as individuals get older.
Emotions and advice
When people find themselves receiving a lot less than they expect following a divorce it is usually because they have allowed their emotions to get in the way. Divorce is an emotionally difficult time for most people, but it is also important to keep in mind that the financial implications of a divorce will remain for years to come. Trying to “get even” or being overly generous during a divorce are both surefire ways of reaching a property settlement that can seriously damage one’s financial position in the future.
The best way to avoid emotions clouding one’s judgment is by bringing in neutral third-party help. Therapists and financial advisers can provide the expertise that is often needed to make sure divorcing spouses do not make decisions against their own best interests. Expert legal advice is also necessary to ensure clients don’t end up hurting their financial position through a misunderstanding of the law.
In fact, having an experienced family law attorney on one’s side is often the key element in achieving a favorable property settlement during divorce. While many people consider representing themselves during divorce, such an approach is almost always a dangerous idea and often ends up leading to a final divorce order that can leave a person without enough funds to enjoy a comfortable retirement. By talking with a family law attorney today, people going through a divorce will have the help they need in protecting both their interests and their plans for the future.