Earlier this week, we wrote a blog post about so-called “gray divorce,” which refers to the increasingly-common phenomenon of divorce after the age of 50.
A late-in-life divorce can present significant opportunity for personal growth and happiness during the retirement years. However, it can also prevent significant challenges, especially in regards to money and finances. Earlier this week, we began a series of tips on preparing for and getting through divorce financially intact. We will continue discussing those tips below.
As any person who is nearing retirement should do, spouses who are considering divorce after 50 need to make sure that they are planning for the future. Unfortunately, you will probably need to divide your 401k and other retirement and pension plans with your spouse in divorce, depending on the amounts each of you have saved for retirement. Make sure that you execute a qualified domestic relations order (QDRO) which will direct your spouse’s retirement plan administrator on how to properly divide the accounts.
Similarly, like any person who is over the age of 50, you will need to have an estate plan prepared. Don’t forget to update your will, trust, life insurance and pension beneficiaries after a divorce in order that your former spouse is not the one who will receive the payouts from these plans. In addition, as your financial situation will probably look much different after divorce, you need to make sure to revise your estate plan documents to reflect your current financial situation.
And perhaps the most important tip of all: if you are not sure of how to handle your finances, consult a financial planner or another qualified expert who can help you make a plan and protect your retirement.
Source: Huffington Post, “Coping With A Grey Divorce,” Lubov Stark, Esq., Nov. 20, 2012