Everyone's heard by now about the increasing trend of late-in-life divorce, also called gray divorces. Baby Boomers are far more likely than their predecessors to choose to end their marriages, deciding that being happy is more important than maintaining the status quo. Though this can be good news in many ways, it can lead to trouble in other, often monetary, ways. When divorcing so close to retirement, there is often more money on the line and less time to rebuild your financial nest egg. This article will discuss some tips for protecting your financial interests during a gray divorce.
Analyze your assets and debts
When 20-somethings divorce, it can be complicated. However, the process becomes staggeringly more complex when you add several decades and the accumulation of numerous assets and debts. To begin the process of dividing your marital financial estate, you need to identify and track down everything that's out there. This means locating every bank account, retirement fund, investment account, insurance policy, etc. Your search should be exhaustive and should include accounts for jointly held assets/debts as well as those that are separately maintained. Only after you know what's out there can you begin dividing the pile.
Watch out for healthcare issues
When younger couples divorce, maintaining health insurance coverage is seldom a major topic of conversation. However, for couples in their 50s or 60s, this can be a crucial issue. When one party is covered under the other's insurance plan, it can be a extremely difficult to have to shop around for new coverage later in life – especially if the party shopping for coverage has preexisting conditions, as that could result in dramatically increased costs. One option is to try and arrange for coverage to be continued for the spouse in need. If that doesn't work, that should should determine the cost of obtaining new coverage and be sure to include that when assessing the overall cost of the divorce.
Breathe deep and remain calm
The best advice for those preparing for divorce, especially those eager to hold onto as much of their own money as possible, is to remain calm. The surest way to blow through marital money is to engage in a bitter fight with your former spouse, as contested legal battles can be quite expensive. Though it can be understandable to react in anger during such an emotional time, do your best to remain levelheaded and calm, as cooperation is a critical component of keeping costs low.