Finances are an important issue and concern at the end of marriage for spouses at any age. Divorce for those over 50, particularly women, have unique problems.
On average, women over 50 may not have been employed for many years and generally earned less than their male counterparts. Female spouses may also need more money over time because they live longer.
Several steps can help alleviate these challenges. It is important to get access to all important financial documents because the other spouse may try to hide assets and withhold this information. At least three years of tax documents should be collected for information on different tax schedules that the other spouse did not provide. A spouse should also copy all financial statements, obtain the hard drive from the family computer and record all of the objects in their home with their smartphone in case the other spouse tries to remove and hide property.
Spouse should also assure that they know their husband’s work history to assure that they know about retirement plans and tax deferred compensation. An accountant may be helpful for couples in a high asset divorce to compile information on assets.
Division of property also has financial consequences. Having non-liquid assets like the family house may lead to property taxes and maintenance expenses. Other assets such as businesses can reduce cash flow and create heavier expenses for the spouse who no longer shares the cost of these items with their former spouse.
Tax consequences apply to divorce. Assets divided at the time of the divorce and child support are not subject to federal taxes. Alimony is taxable but may nonetheless help a spouse receive education and training and transition into the workforce again. Capital gains taxes may also apply to division of brokerage accounts and a spouse should try to pay equal taxes on capital gains on these assets.
Spouses receiving alimony may consider having a life insurance policy on their spouse to protect this support during divorce proceedings. The wife should pay the premiums to help assure that she has sole ownership of the policy.
Finances are only one aspect of a divorce. An attorney can help assure that a spouse exercises the best options for other divorce legal issues such as child custody and support.
Source: U.S, News and World Report, “Gray Divorce: What Women Who Divorce Later in Life Need to Know,” Debbie Carlson, July 21, 2016
