Financial planning can ease strain of grey divorce

Financial planning can ease strain of grey divorce

| Mar 16, 2021 | Divorce |

Divorce at any age can be daunting, but research shows that those who divorce earlier may have a better chance at recouping their financial losses than those who divorce later.

Why does a grey divorce strain finances more?

When people divorce in their late fifties or sixties, they are coming to the end of their working life. As a result, they may not have enough time to regain financial footing, as asset and cash flow has gone down, household income has decreased and resources are diminished as a whole. Even the best laid out retirement plan can take a hit, if not approached properly.

Planning to ease the financial burden

However, with financial education and planning, it is still possible that finances do not become unbearably strained after a late divorce. Creating a budget, managing financial expectations and perhaps even considering delaying retirement can be some steps to alleviate the financial burden of a divorce. Couples should also begin identifying and splitting their assets, and what laws apply with regards to them. Other factors to consider are:

  1. Pension division: pensions need to be valuated and decisions regarding who gets the benefits if the employee spouse passes need to be made.
  2. Social security benefits: are social security benefits available to a divorced spouse or divorced widow?
  3. Debts: as couples grow older, they may have accumulated more debt. Who is going to be responsible for paying those debts and what happens if someone is unable to pay?
  4. Estate planning: wills, trusts, power of attorneys, healthcare proxies, account transfers and healthcare directives are just some of the estate planning documents that need to be reviewed after a divorce to ensure appointed agents are updated.

While these matters may seem overwhelming at the time, going through these steps right now may help lessen the financial burden a grey divorce may bring. While life will undoubtedly be different after a divorce, there is no reason it has to be difficult. An experienced family law attorney may be able to discuss various options with a divorcing couple.