Retirement funds, insurance big issues in gray divorces
Experts say spouses need to approach divorce calmly to avoid financial damage
With a quarter of all divorces now including a spouse who is over 50, according to Bloomberg, the gray divorce phenomenon has become an everyday fact in American life. Divorcing in later life may be relatively common nowadays, but experts say the trend is throwing up unique challenges to couples who divorce later in life. Issues, like retirement assets and health insurance, tend to take a much more central role in gray divorces than they do for younger couples.
How to approach a gray divorce
While no divorce is stress free, when divorce comes later in life, and especially if it marks the end of a long marriage, then the potential for emotions to get in the way is particularly heightened. Experts suggest approaching divorce as a business transaction and to look at how division of marital assets can best secure a comfortable retirement.
Of course, taking such a detached view is not possible for everybody and that’s why having a third party providing advice is so important. Financial advisors and legal experts can give divorcing spouses the objective point of view they often need to make the right decisions.
Pensions and insurance
In gray divorce, retirement assets, like pensions, are likely to play a central role. Although pensions, like other marital assets, can be split between both spouses, it’s important to consider one’s unique circumstances. In some cases, for example, it may make more sense to give up another asset, like the family home, in order to hold on to the entire pension.
Furthermore, according to USA Today, insurance is another extremely important consideration. Health insurance, for example, is likely to become a highly valued asset as people approach retirement. Also, what many fail to remember is that their insurability for many types of insurance plans decrease as they get older, meaning giving up coverage during a divorce can make it even more difficult to find similar coverage afterwards.
The main point to take away from the above article is that divorce can be a highly complicated process for anybody, but especially so in later life when important and difficult financial issues will have to be resolved. It is important to realize that a divorce order is usually final, meaning there is no room for error when it comes to dividing the marital property in such a way that a person is adequately provided for during retirement.
In light of these unique considerations, it is imperative that people contending with a gray divorce talk to a family law attorney as soon as possible. Expert legal advice can make a significant difference during the divorce process and can help ensure people are able to protect their assets and retirement plans.