To get a divorce at any age is stressful, but getting one at a later age can be even more taxing. At the time of divorce, there is generally a mad scramble to find out exactly what your soon-to-be ex-spouse’s financial situation really is. You also have to protect the assets you have as well.
With a late-in-life divorce, you may be in a financial situation that requires you to return to the workforce, cashing in an insurance policy or using some of your savings to see you through. These are all things you may not have wanted to do when you got married. Remaining on the alert during your divorce is vital.
Many older people who are getting a divorce are not only missing out on the fact that their spouse is no longer there to take care of them, but their financial situation may be declining as well. Men who divorce may see their income fall by 20 percent, but women fare much worse and may see their income fall by as much as 41 percent.
If you are one of those people who are getting a divorce, you must find out where the money is. Many times a spouse will have a hidden account, intentional or not. Property that was inherited or brought into the marriage is considered separate property, but other savings and retirement accounts are not.
One of the areas that is often overlooked is capital-loss carryforwards. What that means is that you can deduct as much at $3,000 of investment losses per year. Any losses above that amount can be carried forward to offset gains in future years. Many times, the couple will sell everything at the bottom and will not listen to their professional when finalizing the details of the divorce.
Taking a 401(k) and dividing it can be more complex. A special qualified domestic relations order from a state court must be drafted by an attorney and then approved and signed off on by a judge.
These and other situations can best be handled by an experienced legal professional. It’s important to make sure your divorce leaves you with what you deserve. Because of this, the advice of an experienced family law attorney can prove very helpful.
Source: Nasdaq, “Keep an eye on finances during a divorce” Kiplinger, May. 23, 2014