Attorney Barbara Ann Dalvano
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Divorce Later In Life - and the Effects on Your Retirement Years

1/13/2016

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I have previously written a number of articles about divorce and the impact on retirement planning, pensions, wills and trusts and general finances. (“Divorce in American”; “Almost Divorced”)
A recent Squared Away Blog (January 7, 2016) has the title “Financial Fallout from Gray Divorce” – so of course I wanted to read more about their research on the topic.
Apparently the divorce rate for baby boomers has escalated and 650,000 people over fifty years of age are involved in divorces in the United States.  Most alarming -  according to the article – a typical baby boomer had 77% less wealth after a divorce then prior to the divorce. One interpretation is that a person contemplating a divorce later in life could risk three quarters of their wealth following a divorce settlement.
The statistics for women are worse, since divorce after fifty can actually have serious long term impacts on their future standard of living. 
Divorces that occur later in life can affect pensions, IRA’s, trusts, adult children and grandchildren.  Baby boomers who find themselves in a divorce ‘battle’ can even risk their homes, since a ‘forced’ sale can greatly affect the timing and price of the house sale.
Divorce can be both emotionally and financially draining. One piece of solid advice (from divorce lawyers as well as financial planners and estate planning lawyers) is that before you begin the process of divorce – make sure you consider every aspect of your future planning. 
One often forgotten aspect is to review beneficiary designations; wills and trust document; pension plans, etc. prior to the final settlement (that period between the separation agreement and the final decree) and if possible prior to discussions with your ‘soon-to-be-divorced’ spouse.
 
I will repeat some thoughts from my previous article:
 
 From an estate planning perspective: Here are some steps to take immediately after the decision to separate and BEFORE the final divorce:
 
1. Review all beneficiary designation changes, including insurance policies, IRA’s, pensions, as well as stock option plans, etc.
2. Review all trust and family trust documents.
3. Review/revise your estate plan and decide if (what) you want your soon-to-be ex to inherit
4. Review your will – revise your will immediately upon filing – do not wait until divorce is finalized
5. Decide changes of guardianships/conservator of any minor children e.g. do you still want your soon-to-be ex-in law named as a guardian?
6. You are on your way to becoming possibly a single parent. Review successor trustee arrangements to protect your minor children e.g. would you still want your ex-sister-in-law to be name as successor trustee?
7. Deeds (Land, Property, etc)  – if a divorcing spouse dies before the final divorce decree has been entered, the couple is still married.  (Note the word ‘divorcing’ and not ‘divorced’!) The divorcing spouse could be entitled to all rights and privileges of a spouse and there is the potential of an “unintentional” inheritance.
8. Small Businesses – if you own a business with your spouse, or they sit on the Board of Directors; own shares or hold an executive position in the company– then divorce is particularly fraught with legal issues.  To protect your investment, consult with an attorney as soon as a decision to separate/divorce has been made.
 
The best advice is that if you are contemplating divorce later in life, be aware of all the long term financial aspects; seek the counsel of a qualified attorney before filing for divorce and be mindful of what can happen during the interim.
 
Working to Preserve Your Wealth and Protect Your Future…in a Constantly Changing World
 
Visit my website:  www.attorneybarbaradalvano.weebly.com
Read my full disclaimer and “How I Can Help You”
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    Barbara Ann Dalvano, Esq. has been practicing in the estate, trust, business and tax planning fields of law for over 30 years.  She is the author of the "Sticks & Mortar, Grounded in the Law" Blog.

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