People who divorce later in life need to take account of additional financial concerns
Divorce is a stressful and complicated process for any couple, but for the increasing number of people divorcing later in life, additional financial considerations are likely to make the process even more complicated. According to the New York Times, people going through so-called gray divorces are likely to bring extra financial assets to the table, such as retirement funds, that will need to be divided fairly between both parties.
Gray divorces rising
According to the National Center for Family and Marriage Research, the divorce rate for people 50 and older has doubled since 1990. By 2030, 800,000 such gray divorces are expected to occur each year. The reason for the increase is multifaceted, but likely includes increased lifespans, many women becoming more financially independent, and a greater social acceptance of divorce.
However, gray divorce is not without its own stresses. As one Minnesota man said of his divorce after 30 years of marriage, a gray divorce is likely to lead to a serious reconsideration of a person's retirement plan, not to mention the emotional anguish and confusion that is likely to follow a divorce after a long-term marriage.
Divorce and taxes
One of the most important, and often overlooked, aspects of financial asset division following a gray divorce concerns taxes and retirement plans. Many people going through a gray divorce are likely more concerned about rebuilding their emotional lives rather than focusing on financial details. However, overlooking these financial considerations can have serious repercussions in retirement.
As Investment News recently reported, a woman who received a portion of her ex-husband's 401 (k) plan found out that the portion of the plan owed to her was still subject to taxation. The Tax Court in that case ruled that simply because her husband owed her a portion of his 401 (k), she was still responsible for paying taxes on the portion of the plan that went to her.
Legal representation in divorce
The above stories simply show how important professional assistance is following a divorce. Anybody going through a divorce will already be coping with the emotional stress that often arises following an unsuccessful marriage. Therefore, it is extremely important to have an experienced family law lawyer during a divorce to cover the details that many people may otherwise overlook. With qualified legal advice, divorcing couples will have the help they need to make sure their future financial considerations are as adequately taken care of as possible.