Divorce over 50, often called “gray divorce,” continues to increase and can become exceedingly complex due to the years these couples have been together. Divorcing late in life leaves less time to recover from financial missteps, and one wrong move could cause you to put off your California retirement or take drastic measures to rebuild your savings. Become aware of some common pitfalls so you can navigate your divorce wisely.
Not planning for future finances
A lot goes on during the divorce process, and it’s easy to put off financial planning and budgeting for life as a single person. If you are not yet eligible for Medicare, you will need to budget for new health insurance. When filing your first tax return as a single person, you could be surprised by unexpected tax implications due to the property division stage of your divorce. Planning finances early for a good post-divorce life is essential to your self-care.
Failing to record all marital and separate assets
If one partner managed all the finances, the other might have only a vague idea of the complete list of marital assets. There are legal ways to protect certain assets during divorce, and although it is illegal for a spouse to hide assets, it still happens. The spouse who did not manage the money must compile a list of bank and investment account numbers, balances, savings accounts, life insurance policies, and status or information on any other retirement funds.
Not letting go of the family home
The home you shared with your family might have sentimental value, but it comes with a financial burden. If your budget is smaller after the divorce, you might manage more easily without the utility bills, yard maintenance, repairs, and other larger expenses that come with a family-sized house. Proceeds from the family home could also help pay off debts while providing a fresh start in a new place.
Divorce brings many challenges, but you can look out for your best interests by avoiding common mistakes. If you plan for your post-divorce budget and know all the assets you have a right to receive, this can significantly ease the transition to single life. Letting go of the family home might feel overwhelming, but it could also be a weight off your shoulders and a positive financial move.