Divorcing After Retirement Is Costly
Few things can affect your finances more than divorce, especially when the divorce requires court appearances. Divorcing after retirement, however, can increase the financial burden exponentially. The primary reason for this is that once retired, the partners are living on their existing resources without the means to produce further income. In other words, both parties must have the ability to sustain their quality of life with existing assets and resources.
If you plan to get a divorce after retirement, the best thing you can do is engage the services of a talented family law attorney to resolve the divorce, and a certified divorce financial analyst to help sort through and provide recommendations on how to split the assets. While it will still be costly, doing it right will help tremendously in the long run.
What Is Gray Divorce?
Gray divorce is a colloquialism that refers to divorces that occur in couples over 50 and who have been married for 20 years or more. After being married for such an extended period, such couples tend to have much more complex and interrelated finances.
Why Is Gray Divorce More Expensive?
While divorce can be costly, the countless years of interrelated finances, assets, and money saved in retirement plans require extensive work to sort out and reach an agreement. It is often difficult to remember just who purchased what and who is responsible for each asset accumulated over the years. Just in terms of the accountant and court fees, the costs can ramp up.
When younger people get divorced, the costs can be offset by the continued ability of both parties to earn income to support their respective qualities of life. Once retired, both parties must look at the fact that they will need to support themselves with their existing resources individually. Draining your financial resources in a long, drawn-out court battle should be avoided whenever possible.
So, I’m Getting the House – Is That Smart?
A common divorce settlement will leave the husband with the majority of the assets and leave the wife with the house. Sounds fair at first, but how about in the long term? The woman is now saddled with the care and maintenance of the house while maintaining a much lower cash flow than the man. In this type of divorce settlement, the wife typically experiences a more significant reduction in her quality of life than the ex-husband.
What About Health Insurance?
Health insurance, especially in later years, is a significant concern due to the higher medical bills typically associated with caring for a person later in life.
Often, spousal health insurance is covered by the employer of one spouse. In a pre-retirement divorce where both spouses work, this may not be a significant factor, as both can retain employer-sponsored health insurance. But if only one spouse is employed, ensuring health insurance coverage can be exceptionally important.
What’s the Solution?
The first thing to do is to evaluate whether you want to move forward with divorce proceedings, understanding the impact it will have on your future life. If you still wish to proceed, contact Nottage and Ward, LLP, today at (312) 332-2915 to discuss this challenging situation. We have over 25 years of experience helping families through difficult times and a proven track record of successfully sorting through complex divorces, so call us today and see how we can help!
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