The divorce rate for people 50 and older is on the rise. Ending a marriage closer to retirement presents some financial challenges, but there are things people can do to address them.
Before meeting with an attorney, people should make a list of all assets as well as a list of all jobs held by either person. The former will serve as a jumping-off point to begin considering how property will be divided. The latter will help with compiling a list of stock options, pensions and other types of benefits from long-ago jobs that a person might have forgotten.
If one person will pay alimony, there should be a plan in place in case the payer dies, becomes disabled or is otherwise unable to keep up the payments. Life insurance may cover the person’s death. A person may want to be named as both beneficiary and owner to stay in charge of the premium. An alternative might be to take a lump sum instead of a monthly alimony payment.
People who earned significantly less than their spouses and who were married for at least 10 years might want to find out if they can draw Social Security benefits on their spouse’s working record. Finally, people should make sure all titles and beneficiary designations are current after the divorce.
In a community property state like California, most assets acquired by either person during the marriage are considered marital property. For example, a retirement account may be considered shared property even if only one person contributed to it. If people are dividing a retirement account, they should make sure they understand any rules associated with divisions or withdrawals. They might need a document called a qualified domestic relations order for a 401(k) and some other types of accounts in order to avoid taxes and penalties.