Divorce is never an easy thing. There are many issues that must be sorted out, both emotional and financial. Those issues are compounded even further if the parties are divorcing later on in life. Individuals who divorce over the age of 50 can face very complicated issues in their divorces, especially when it comes to the division of marital property in Wisconsin.
A couple divorcing after 50, in all likelihood, has had a long history together and sorting through decades’ worth of mutually owned property can be a daunting task. However, considering some issues common to divorce later in life can help make the process simpler.
The value of retirement funds can be deceptive. Many people might assume that $250,000 in a 401(k) is roughly equivalent to a marital home worth $250,000. That assumption is wrong because the money in the 401(k) is going to be reduced by income taxes when it is withdrawn. It is imperative that both parties fully understand the true value of those retirement funds in order to have an equitable division of assets. If that’s not the case, then there is a chance that one of the parties may get short-changed.
The next mistake that people make during a divorce is putting too much stock in alimony payments and not enough stock in Social Security. Alimony is great while the former spouse is alive and working, however individuals who divorce later on in life are at greater risk of passing away shortly after a divorce, thus depriving the other party of alimony. Some divorcing spouses focus on establishing a life insurance policy with a former spouse and negotiating for their Social Security benefits. That way, when they leave workforce or pass away, they will still have assets that can be assigned.
Finally, many people do not consider their adult children when they divorce. Parties should consider how their divided assets pass down to their adult children. There have been instances of children being accidentally disinherited because divorcing parents did not consider their adult children in the divorce settlement. A solid divorce agreement can ensure that not only mutually owned property will be properly divided, but also that it will be properly inherited.
Divorce and marital property division can be complex issues and the way to best structure a divorce varies on an individual’s circumstances. If you have questions about divorce, an experienced family law attorney can help.
Source: SmartMoney.com, “Divorce Over 50: 3 Mistakes to Avoid,” Catey Hill, 3/23/2011
