The divorce rate for American couples over 50 has doubled since 1990. For many older Maryland couples, the implications of divorce and subsequent property division look very different from those who are divorcing during their younger years. One of the most hotly contested assets in such so-called “Grey Divorces” is the retirement account. Improper approaches to dividing retirement assets can result in serious financial consequences, so taking the time for discovery and disclosure of assets is absolutely necessary.
When considering which assets to pursue, remember that sentimentality can get in your way. Do not become overly attached to your car or your home, for example, as those ties can lead you into poor financial decisions. Divorce also provides a great excuse for revamping and examining your existing insurance policies, allowing you to look toward the future with confidence. Even though divorce can seem scary, it provides a great opportunity for restarting your financial life on your own terms.
Older divorcing couples should remember that they are looking for long-term security in the assets they choose during the split. Start thinking about your financial goals for five, or even 10, years in the future. In some instances, couples choose to simply split assets half-and-half, without considering the nature of those holdings. Instead of accepting a cash settlement, for example, consider negotiating for a share of a pension. The long-term security that accompanies a pension can be far more beneficial than a lump of liquid assets.
After you have split your assets, you must start reviewing your income and budget. Are you going to be required to pay alimony or child support? Will your income change because of the divorce? Financial planners and experts can help divorcees understand more about the implications of these major life changes.
Legal and financial experts can provide additional advice about asset management and property division during divorce. These professionals can set you up for future financial success by guiding you toward the best property division decisions.
Source: www.forbes.com, “Saving your retirement from a divorce” Greg Brown, Oct. 21, 2013