Twenty years ago, only one out of every 10 people getting a divorce was over 50 years of age. Today, that number is one out of every four. The Baby Boomer generation is living longer, and with that comes a higher divorce rate.
If you are considering a gray divorce, you need to make sure that you have thought carefully about some of the special financial concerns that go along with getting a divorce later in life. Many older couples don’t think about such things as where all the assets are, the cost of keeping the house, and the tax consequences.
In many marriages, one partner has the responsibility to keep track of the finances. If you’re not that person, you need to get up to speed so that you can know how to evenly split the assets. It’s not just bank accounts -- you also need to be aware of any life insurance policies and retirement accounts.
If you’re the spouse who has all the financial knowledge, you should know that it is an incredibly bad idea to try and hide assets. Not only will they be found, but you could also face legal charges (fraud, perjury) and increased settlement costs. No one will appreciate this brazen maneuver, so don’t try it.
It’s not just the assets that you need to think about. It’s also the debts. You can be held responsible for half of all jointly owned debts, such as credit cards or loans. If you don’t know all that you owe, it’s time to order that credit report and have a good long look at it.
Just about every major financial decision you’ve made in your life comes with tax consequences, and a divorce is no different. You may be celebrating with friends over that six-figure investment account that just landed in your lap, but you’ll be crying later when you see the tax bill that comes with it.
Should you be receiving alimony monthly or as a lump sum payment? Are you still responsible for the mortgage until the house comes off the market? Should you have kept the house? Is it better for your bottom line to get the pension income or the investment account? All of these decisions carry tax questions, so you need to talk to an accountant before you begin splitting up the assets.
It may not be such a blessing to keep that family home. Sure, it has lots of memories. But, it can also turn into a gigantic money pit.
Think about the maintenance costs of what is probably an older home. Now, add in property taxes and emergency repairs. Don’t forget the mortgage if you still owe it! These considerations are just as valid as the safety and security of staying put and not moving.
Also, don’t count on a quick sale of the property in case funds get tight. It may not be a seller’s market.
Even something as simple as rolling over a retirement account into an IRA can cause headaches if you’re not sure of what you’re doing. Navigating the finances of a gray divorce can be incredibly stressful. That’s where an attorney comes in.
A caring, experienced attorney can help put your mind at ease and make sure that you aren’t taking unnecessary financial hits along the way. It’s a new chapter of your life -- make it count!
If you are over 50 and are preparing for a divorce, or need help with a current case, and you live in the Atlanta metro area, contact Family Matters Law Group today. Setting up a consultation is easy -- simply call or use our online contact form. We look forward to hearing your story and fighting hard for your assets and your money! Don’t let financial concerns get in the way of a successful gray divorce.