Divorces among older Americans have increased significantly since the 1990s. In fact, census data shows a doubling in divorce rates of people over 50 over the past decade or so. As a result, many seniors find themselves renegotiating retirement plans and other shared assets later in life.
If you belong to that demographic and find yourself seeking to dissolve your marriage, you must make sure that you protect your hard-earned savings to safeguard your future. Keep in mind the following tips when you begin the legal process of ending your marriage.
Separate Your Accounts
Among the first things you need to do is separate your financial accounts. You need to establish your financial independence as soon as possible. While you may need to negotiate splitting financial assets that you have in shared accounts, you can establish accounts in your name during that process.
You can build your own credit history by opening checking, savings and credit card accounts in your own name if you were a nonworking spouse. This will help you establish credit worthiness in case you need to apply for a mortgage or a car loan.
Depending on the advice offered to you by your attorney, you may need to freeze joint accounts until you and your spouse agree on how to divide up your money and the divorce is finalized by a judge.
Make Decisions About Joint Debt
Even after you undergo a divorce, you could still be liable for the debts of your ex. In addition to consulting with your lawyer, you should seek the advice of a certified financial analyst well-versed in divorce proceedings to help you avoid being responsible for someone else's debts. Look for financial advisors with certified divorce financial analyst (CDFA) credentials.
With the help of your attorney and the CFDA, you can compile a complete inventory of individual and joint assets and debt. You will need to decide on how to handle joint bills such as mortgage payments. Your mortgage company will expect payments to be made on time regardless of your situation.
You may need to sell your home or move out of the house in order to settle difficult shared debt negotiations.
Perform a Review of All Retirement, Pension and Military Benefits
Unfortunately, you may be obligated to share your retirement, pension and military benefits with your ex even after a divorce. Make sure to gather every single document you have pertaining to these accounts for your divorce attorney to review.
Even if you have not been on active duty for many years, your spouse may be entitled to a share of your benefits if the marriage lasted for at least 20 years during your time of service.
Your divorce attorney and your spouse's lawyer will draw up a qualified domestic relations order (QDRO), a document that will outline exactly how assets, including retirement funds, will be divided upon your divorce.
If you cannot come to an amicable agreement for splitting retirement accounts and pensions, a judge can decide how those assets will be divided. Some states have community property laws that mandate assets be split 50-50.
Review Your Insurance Coverage and Change Your Will
When your divorce is final, you should review your insurance coverage and remove your ex as your beneficiary. If you have children, make sure that they will be protected and can pay for funeral expenses when you pass away.
In addition, you need to change your will as soon as possible after your divorce is final. You do not want your ex fighting with your family, friends and children over your assets.
Depending on where you live, you ex may be automatically excluded from your will when you get a divorce. If not, your divorce attorney can provide you with guidance on how to rewrite your will.
