In the last decade, the divorce rate in the United States has declined. However, there has been a significant increase in divorce among couples over 50 years old in recent years.
Commonly known as “gray divorce,” the end of marriage between Baby Boomers has doubled. Whether it’s because the children left the family home or being concerned with their own happiness, the culture of divorce has shifted in that specific demographic.
However, the financial impact of a gray divorce can be more substantially complex. A marriage that lasts decades often results in a significant accumulation of marital assets, including retirement accounts, which is why older couples must take the proper steps to protect their property and best interests.
The following are five common mistakes to avoid when divorcing over 50:
- Fail to identify all marital assets – In many marriages, one spouse will control or handle the couple’s finances. This spouse likely had a better understanding of how much money the couple has in all bank and savings accounts, as well as the status of their retirement funds and investments. If you are not that spouse, you need to create an inventory of all assets before you attempt to divide them in a fair manner.
- Hold on to the family home – Although your house is very special to you, think about whether you are financially able to continue to pay for the monthly mortgage, bills, and property taxes, as well as make any necessary and emergency repairs. Can you maintain your home on only one income?
- Forget about taxes – There are tax consequences attached to every financial decision you make during a divorce, whether it’s determining the type of spousal support, keeping or selling the family home, or diving the retirement plan or investment portfolio. It is wise to consult with a tax adviser to identify all the tax implications surrounding property division.
- Ignore what happens to your health coverage – If you are covered by your spouse’s policy, you need to ensure you obtain health insurance after the divorce, especially if you end the marriage before you obtain Medicare at age 65. You can either obtain health insurance from your employer, sign up with a qualified provider under the Affordable Care Act, or obtain COBRA for up to three years in order to use your ex-spouse's cover, which is quite costly.
- Not having a team on your side – Finances can be tricky, especially with an extensive amount of assets. You need to build a team of advisors that you can trust to provide you with the legal and financial implications of your divorce. While this may sound like an expensive endeavor, have the right help can avoid costly mistakes or reduce the overall costs of litigation.
If you are at least 50 years old and interested in filing for divorce, you need to schedule a consultation with an experienced family law attorney. Once you choose a lawyer you are comfortable with, he/she can also provide great recommendations for accountants and other financial advisors.
If you are interested in filing for a gray divorce in Long Island, contact Rubenfeld Law Firm today at (631) 777-7200 for a consultation. Attorney Michael Rubenfeld has more than 25 years of family law experience.