4 tips for managing a later-in-life divorce.
Gray divorces, which happen later in life, can create challenging circumstances. Wealth usually becomes commingled during a marriage and therefore becomes a marital asset, which can be subject to division. One partner might have taken time away from their career to care for kids or aging parents. Even a temporary leave may significantly affect earnings potential when they reenter the workforce. Divorcing after the age of 50 leaves fewer years to rebuild a retirement nest egg. And this is often a time when people experience more health-related issues.
Here are four key actions to take during a divorce.
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Do Some Financial Housekeeping
Gather account numbers and other details of the financial assets for which you now will be solely responsible. It’s important to review the beneficiary designations and make sure they reflect your current wishes. You will also want to check any joint accounts to ensure they have been retitled to reflect sole ownership.
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Build a Wealth Plan
A critical element of a solid post-divorce wealth plan is ensuring that the assets retained in the settlement are invested based on your new needs and goals. Your optimal risk exposure and asset allocation may change significantly due to a divorce.
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Understand the Tax Consequences
Divorce also has tax implications. For example, child support typically is not tax deductible or taxable, but assets a spouse receives in a divorce settlement could be subject to taxes. That’s often the case with retirement plans, as any withdrawals may be taxable.
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Review Your Estate
Ensure that assets will pass to children and grandchildren as intended, even if one parent remarries. Certain types of trusts can help.
Talk to Your Regions Wealth Advisor About:
- Any major life change, such as marriage or divorce, should prompt a discussion.
- How establishing a trust help ensure that your assets will be managed according to your wishes.
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Find a contact in your area.
