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Dealing with finances during a “gray divorce”

On Behalf of | Oct 3, 2018 | Divorce

A growing number of older Americans in Kentucky and across the country are choosing to end their marriages. While divorce rates have held steady or even declined across the American population as a whole, “gray divorce” rates have doubled since 1990 for people age 50 and older. As is the case for younger couples, divorce is more likely when a couple is married for a second time or when they have only been together for a few years. However, many older couples divorcing have been together for many years or even decades.

The financial implications of divorce can be particularly significant for people at or approaching retirement age. The division of retirement funds can be one of the more complex parts of any divorce, and the effect is magnified when both parties will have little time to recover from the changes that accompany asset division. However, financial planning during divorce negotiations and after the end of the marriage can help people to enjoy a successful retirement after the end of their marriage.

During the negotiations over property division, it can be important to keep life insurance in mind. When one partner is a lower earner and will receive spousal support, it may be worth negotiating to establish a life insurance policy for which the former spouse is named as the beneficiary. This helps to provide a level of financial security. In addition, tax consequences for both parties can be considered when dividing different kinds of accounts, especially those with pre-tax funds such as an IRA.

Financial aspects of the end of a marriage may weigh heavily on the mind of people who divorce later in life. A family law attorney might provide guidance and representation throughout the process, including representing a client through negotiations to achieve a fair settlement on issues including spousal support and property division.