In recent years, the divorce rate in the United States has been on a steady decrease. While this is good news, there has been a significant increase in divorce rates among couples 50 years old and older, with Baby Boomer divorce rates doubling. This is commonly known as “gray divorce”. There can be a number of reasons why this is happening. It could be because a child left the home or an overall decline in happiness. No matter the reason, the culture of divorce has begun to shift to an older demographic.
Any divorce will have its share of complications while gray divorce will see more complications than usual. When a marriage lasts for decades, it often results in a large accumulation of marital assets, including retirement accounts, which is why there are some things that older couples need to avoid in order to come out of the divorce as best they can.
The following are five common pitfalls to avoid during the gray divorce process:
- Fail to identify all marital assets – In most marriages, one of the spouses will typically be in control, or at least handle, the couple’s finances. This spouse is much more likely to have a better understanding of how much money the couple has and what is in the savings accounts as well as investments and retirement funds. If you are not this spouse, then you need to take some time and create an inventory of all assets before attempting to divide them.
- Keep the family home – Your family home is important to you but it’s more important to think about who will be more financially able to afford the home’s mortgage, bill, and property taxes, as well as repairs and maintenance. Ask yourself, will you be able to maintain the home with only one income?
- Forget about taxes – No matter what you do during the gray divorce process, there will be tax consequences attached to it. This includes spousal support, keeping or selling the family home, and dividing retirement funds. It’s always wise to consult a tax advisor to lay out all of the tax implications surrounding the division of property.
- Ignore health coverage – If you are covered by your spouse’s policy, make sure that you obtain insurance after the divorce, especially if you end the marriage before you obtain Medicare at age 65. You can obtain health insurance from your employer, a qualified provider under the Affordable Care Act, or obtain COBRA for up to three years in order to use your ex-spouse’s coverage.
- Not having a team by your side – Finances are no simple thing, especially when there is a number of assets attached to them. Before you begin the divorce process, you’ll need a team of advisors that will provide you with accurate legal and financial implications of your divorce. This may sound like an expensive endeavor but having the right team by your side can actually save you money in the long run.
The Right Team For You
Gray divorce can be a complicated process and if you’re not careful you can come out the other side even worse off than before. To make sure this doesn’t happen, you need a team you can trust. Yaffa Family Law Group is here to help guide you through this process. We always have your best interests at heart and we want to see you come out of this happier than ever before. Visit our contact page if you need assistance with your gray divorce.