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Tips for dealing with finances when divorcing later in life

On Behalf of | Feb 27, 2018 | Divorce

Divorce has been on the rise over the past 25 years for people older than 50. This can mean certain financial concerns for people who divorce as they are approaching retirement. However, people in Arizona may be able to protect themselves financially by taking these steps.

First, before meeting with an attorney, an individual should put together a list of all assets and all jobs held by them and their spouse. This can help in planning for property division. Sometimes, people might have job-related assets they have forgotten about such as retirement accounts, profit-sharing plans and more. If one person will pay spousal support to the other, the couple should consider what will happen if the payer dies, becomes disabled or suffers a loss of income. They may want to put a life insurance policy or another type of insurance in place. Another option is taking a lump sum rather than monthly payments.

A spouse who has earned significantly less than the other may be eligible for Social Security retirement benefits based on the earnings of the higher-paid spouse if the marriage lasted at least 10 years. After the divorce, both spouses should review all beneficiary designations and titles and make sure their ex-spouse is removed.

In Arizona, a community property state, most assets acquired since the marriage will be considered shared marital assets. One exception might be inheritances that have not been mingled with marital property. However, this means that if only one spouse was the main breadwinner, the other spouse may still be entitled to an equal share. If the couple does want to split everything 50/50, they might be able to work out a fair compromise in which one takes certain assets and the other takes the remaining assets. Negotiating allows them to control the outcome of asset division better than if they went to litigation.