Divorce often leads to money problems, and there are particular financial implications older adults. With fewer years ahead of them until retirement, they do not have as much time to make up savings lost in the divorce. Furthermore, after decades of a shared life, unraveling their finances may be complex. The tips below may help people in Tennessee protect themselves financially.
Understand your marital finances
The first step is to understand your marital finances and know what assets you and your spouse have, both together and separately. This may include gathering tax returns, titles, account statements and any other paperwork related to your financial affairs.
Retirement accounts may be a particularly important asset for older adults, and you should make sure that you understand how to divide them to avoid taxes and penalties. For example, if you need to divide a 401(k), a document called a qualified domestic relations order is required.
There are a number of other financial points you should consider. While you may want to keep the family home for sentimental reasons, you might not be able to afford it on one income. You may want to consider long-term care insurance since you will not be able to rely on your spouse as a caregiver although you may be eligible for Social Security benefits on a former spouse’s income. If you planned to leave an inheritance for your children and you remarry, be sure that your estate plan does not direct everything to your new spouse.
Divorce can mean a fresh start at any age. While there are some challenges for older adults who are divorcing, with careful planning and attention to the legal details, you can keep your finances healthy. A family law attorney may help you protect your financial future throughout the divorce process.