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12 Mistakes to Avoid If Divorcing After 50

Research shows that the divorce rate amongst couples age 50 and over is increasing. Several experts have attributed the reason for this to things such as Americans living longer and wanting more out of their relationships as they age and other typical causes of relationship stress such as financial difficulties. According to a 2022 article from Investopedia by Catherine Fredmen, the divorce rate amongst persons 50 and older didn’t just increase, it nearly doubled.

One of the major eye openers for couples over 50 is the significant increase in the cost of living from when they were single. This combined with the fact that a couple divorcing later in life will have additional considerations for their retirements account and financial assets due to having less time to recoup losses, pay off debt and weather fluctuations in the stock market. One of the major concerns for women in this category are the statistics associated with the drop in income for women after a divorce. In fact, the U.S Census Bureau records indicate that 20% of women fall into poverty after a divorce.

With all of the issues that must be addressed during a divorce in general, the Investopedia article focused on 12 mistakes couples 50 and over can avoid when planning for a divorce. They are as follows:

  • (1) Failing to create an inventory of assets
    • The divorce filing begins the discovery process where each party is required to disclose their assets and liabilities. This gives the court the necessary information in order to determine how property should be divided and whether any spousal support is needed.
    • You will need to take an inventory of all assets before attempting to split them up. Additionally, creating an inventory of assets and obtaining pertinent financial records will assist with preparing your case. Ideally this should be done prior to the separation, especially if you will not have access to them afterwards.
  • (2) Holding onto the house
    • A lot of thought should go into whether to keep the marital residence. Several recently divorced couples have found the home to be a drain on household finances when there is only one income maintaining the residence. The real estate market has been particularly favorable to sellers in the recent year. However, homeowners shouldn’t assume that the market won’t change.
  • (3) Not knowing what is owed
    • Debt is the one item that can live on even after a marriage has ended in divorce. There are instances where each spouse could be responsible for each other’s debt. To that end, it is advised to obtain a credit report for both you and your spouse just to be sure that there aren’t any surprises about who owes what.
  • (4) Not paying attention to tax consequences.
    • It is advised that you meet with an attorney and or tax advisor in order to have the necessary information about the financial impact that receiving alimony or a retirement account distribution can have.
  • (5) Forgetting about health insurance policies
    • This can be particularly difficult for those parties that have depended on the other spouse’s employment for health insurance. Three options exist for persons in this scenario
      • Employer provided health insurance
      • Affordable Care Act and
      • COBRA
    • A legal separation may be an option if the prospect of obtaining health insurance becomes difficult or unaffordable.
  • (6) Rolling over your Ex’s retirement account into an IRA
    • If you fund your IRA with your share of your former spouse’s retirement account and make a withdrawal prior to 59& a half there will be penalties.
    • It is recommended to protect retirement assets through a qualified domestic relations order (QDRO) which allows you to make a one-time withdrawal from an ex’s 401K without paying the standard penalty.
  • (7) Financially supporting other adults (i.e, children)
  • (8) Hiding assets from your spouse
    • Having the advice of an experienced divorce attorney is essential. Each spouse is required to submit a financial affidavit to the court which specifies all assets and liabilities. Making misrepresentations on this form could lead to negative treatment from the court and additional legal fees.
  • (9) Underestimating your expenses
    • It is important to take a realistic look at your lifestyle and financial needs with only one income.
  • (10) Treating divorce advisors as friends
  • (11) Overlooking the value of a future pension
  • (12) Not consulting with a team of professionals

Divorce can be difficult because of all the life altering decisions that are made during the legal process. However, the difficulties of a legal divorce can be severely exacerbated by failing to plan. Actions such as obtaining financial documents and account information, preparing for living on a single income and fully understanding the financial implications of a divorce can make all the difference in the success of your outcome. Most importantly, it is necessary to consult an experienced Atlanta Divorce Attorney to advise you of all your legal rights. Attorneys at the Faucette Law Firm, LLC represent clients in all areas of family law and divorce, including contested and uncontested divorce, child custody, child support, alimony, legitimation and modifications. Contact our law firm today for a consultation.

 

 

 

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