In the last few decades, the number of couples over 50 choosing to divorce increased sharply. Many studies indicate that this increase is a result of the changing attitudes towards divorce, as well as the rise in women who are financially independent from their husbands.
Regardless of the reasons older couples decide to divorce, it is critical that they are aware of – and prepared for – an often-complex process of dividing their property.
Gray divorces frequently involve financial challenges
Dividing marital assets during divorce can always have a large impact on an individual’s finances, no matter their age. However, it is often a particular challenge in gray divorces. According to Bloomberg, some individuals seeking a divorce over 50 often see a 50% decrease in their wealth and a considerable decrease in their standard of living as well.
There are many reasons these divorces can lead to financial issues, including:
- More assets: Couples accrue many assets over the years. And couples over 50 usually have been married for many years. Generally, the longer the marriage, the more assets they must divide when they divorce. This includes everything from the furniture to family heirlooms, as well as vehicles and real estate properties.
- Retirement: Kentucky property division laws require divorcing couples to divide all of their marital assets – including each spouse’s retirement savings and benefits. Many individuals in gray divorces are either near retirement or already retired. Therefore, dividing this particular asset can have a much more profound impact on one’s financial future when they are closer to retirement age.
As long as individuals are aware of these potential challenges, they can plan for them and preserve their financial future.
Your financial future also involves your estate plan
Another common financial issue in gray divorce has to do with one’s estate plan. After all, many people name their spouse as someone to inherit their assets or even the person who manages their finances and estate after they pass.
Therefore, individuals should review and revise their estate planning documents to address questions such as:
- Who will be the executor of their will?
- Who will inherit property after they pass?
- What happens to their assets?
Kentucky law actually rescinds any distributions an ex-spouse would have received after the divorce is final, but it is still critical for individuals to review these matters so they can avoid challenges and protect their financial health after divorce.