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:
- Pension division: pensions need to be valuated and decisions regarding who gets the benefits if the employee spouse passes need to be made.
- Social security benefits: are social security benefits available to a divorced spouse or divorced widow?
- 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?
- 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.