Divorce at any age can be emotionally and financially devastating, but when a couple divorces near or after retirement the financial consequences can be far-reaching. Because people who are divorcing after 50 often need to deal with the difficulties of high asset division, these divorces tend to be more complex and may often be contentious.
Divorcing after 50 can also be difficult because of the stage of life that individuals are entering at that time in their lives. For instance, if you and your spouse are dependent on your shared retirement savings for your income, it can be difficult to know how to best divide those savings so that you are both can continue to enjoy a comfortable retirement.
In this blog we will discuss some considerations that you may want to keep in mind to protect your financial well-being during a grey divorce.
Understand New York's Property Division and Spousal Support Laws
No matter what age you are divorcing, it is important to understand the laws pertaining to both property division and spousal support. According to New York state law, all marital assets must be divided in an equitable manner. This means that the division of shared assets must be fair, but not necessarily equal. Additionally, spouses may receive spousal support based on such factors as the length of the marriage, each spouse’s income level and earning potential, and any other financial considerations.
When dividing assets during a grey divorce, it is important for couples to consider their financial future as well as current circumstances. For instance, when determining whether spousal support should be awarded, couples should take into consideration factors such as age or health status that may impact either spouse’s ability to generate income. It’s also important to remember that couples over 50 may have more complex assets, including investments, multiple properties, and businesses. Hiring an experienced divorce attorney to help you navigate these issues is therefore especially crucial during a grey divorce.
Some key considerations when approaching property division and spousal support during a grey divorce include:
- Length of marriage: How long you were married can affect how your shared assets are divided.
- Income/Earning Potential: Both spouses’ income levels as well as their future earning potential should be taken into account when dividing up assets.
- Financial Dependency: If one spouse is financially dependent on funds from their shared retirement savings account, it may not be beneficial to divide those funds equally if one spouse will need more money for living expenses going forward.
Become Financially Literate
It's not uncommon in marriages for one partner to be more involved in the financial administration of a shared household than the other partner. However, if both partners do not have a good working financial literacy, it can be difficult for the partner who lacks a working knowledge of how to manage their own finances to know how to proceed with managing their own household financials when they get divorced.
Fortunately, there are many resources available for people to learn how to manage their own finances. Consider taking a class, exploring online resources, or reading books to help you become informed about budgeting, investing, and other financial matters. While it may seem intimidating at first, taking small steps toward financial literacy will help you to find financially security.
Inventory Your Assets and Debts
When you are facing a grey divorce, it is important to understand the financial implications of your situation. It is essential to have a full understanding of all assets and debts that need to be divided between both parties for the process to move forward smoothly.
One of the first steps you should take when going through a grey divorce is making an inventory of all shared assets and debts. This includes any joint bank accounts, investments, retirement savings, or other property owned by both parties. You should also make note of any debts that have been incurred during your marriage such as mortgages, student loans, car loans, or credit card debt. Having this information on hand can help ensure that all aspects of your financial life are taken into consideration when dividing up assets and liabilities in an equitable manner.
In addition to making an inventory list, it’s important to understand how each asset will be valued in terms of its current worth as well as future potential value after the divorce has been finalized. For example, if one spouse owns stocks or mutual funds with their name on them those may need to be sold off before they can be divided equally between both parties involved in the divorce proceedings. Understanding how these types of assets are valued can help both parties come to an agreement on a fair division of their joint financial portfolio.
Create a Post-Divorce Budget
It’s important that you create a prospective post-divorce budget so that you and your attorney can work these projections into your settlement negotiations.
Creating a budget can be difficult if you are unsure of how to allocate your resources, but here are some factors to keep in mind:
- Expenses: Make sure to track all your current expenses and let that be a guide for projecting your future expenses. However, it will likely be necessary to consider if and where you can make any cuts to your spending so that you can protect your future financial comfort. You may also need to consider prospective increases to your expenses, such as healthcare costs.
- Income sources: Consider all sources of income including wages from employment, investments such as stocks and bonds, and other sources of income such as social security.
- Savings & investments: Depending on your age, it's important to save for retirement and build an emergency fund for unexpected expenses. Make sure you can give yourself a financial cushion for unexpected expenses.
- Debts & loans: Prioritize paying off high interest debt first while keeping up on payments for lower interest loans. If necessary, look into refinancing options or consolidating loans so you can make smaller payments over time without accruing additional interest charges.
Your post-divorce budget should be tailored specifically to fit your individual needs and circumstances while also taking into consideration any future changes in lifestyle or income levels due to the divorce proceedings.
Protect Your Business
If you own a business and are going through a grey divorce, it is important to consider how your business might be affected by the process. A thorough asset assessment and inventory should include any shared business assets or liabilities that have been accrued during the marriage. Additionally, if one spouse owns a business prior to the marriage it is important to determine whether this qualifies as marital property and must therefore be divided in an equitable manner.
To protect your business from any potential financial losses due to the divorce process, there are several steps you can take:
- Separate business accounts: Create separate accounts for business transactions so they are not intertwined with any marital funds or assets.
- Establish valuation process: Establish a clear and consistent valuation process for all business assets or intellectual property to ensure that both parties receive their fair share of shared assets.
- Acquire professional advice: A divorce lawyer who has experience with business asset division should be able to help you assess your options.
- Review partnership agreements: If both parties are involved in running the business together, review existing partnership agreements and make any necessary amendments prior to finalizing the divorce settlement.
When discussing these matters, couples should consider such topics as who will retain ownership of shared real estate holdings used by the family business, which partner will take over management of day-to-day operations, and what percentage of profits each person will receive after taxes and expenses have been paid out. Being able to communicate openly about these topics ahead of time can help ensure that both spouses feel secure about their financial futures after the divorce has been finalized.
Don't Navigate Your Grey Divorce Alone
At Samuelson Hause & Samuelson PLLC, we understand the unique needs of our clients facing grey divorce proceedings and are dedicated to providing experienced legal guidance during this difficult time. Our team of experienced divorce attorneys will work with you every step of the way to ensure that your rights and interests are protected as you move forward with your life. We strive to make sure all assets are divided in an equitable manner and that spousal support payments remain fair after separation has occurred. Let us help you transition into a new life with as little stress and anxiety as possible.
Don’t navigate your grey divorce alone – contact us online or call Samuelson Hause & Samuelson PLLC today at (516) 584-4685!