Late in life divorces are becoming much more common. Often, once the children become grown and set out on their own, the parents realize that they have nothing in common anymore and choose to divorce. As you face your own divorce, you may realize that several of your friends in Colorado Springs are already on second and even third marriages.
While the prospect of starting over later in life seems absolutely terrifying, it is not impossible. With a little forethought and planning, you can take the necessary steps to protect your financial future as you stare squarely at divorce and retirement. Read below for three tips to help you in a gray divorce.
Dividing marital property
Like most other states, Colorado is an equitable distribution state. This means that if you allow the court to divide your marital property, it will do so in a way that it deems is fair. Keep in mind that fair does not necessarily mean equal. It is possible that you and your husband will walk away with a disproportionate amount of marital assets. The court usually bases its decision on factors such as the length of the marriage, the contributions made by each spouse, your age and overall health, and even potential future income.
Regardless of whether you and your spouse attempt to reach a settlement agreement out of court or let a judge decide, you will have to determine the value of all the marital property. When you do this, be sure you take the tax consequences of each asset into consideration. By not factoring in tax treatment, you may find yourself with much less than you anticipated.
Update beneficiary information
As soon as possible, update the beneficiary information on your retirement accounts, life insurance policy and even in your will. Once your divorce is final, the last thing you want is for your ex to benefit from your death by receiving the funds from your retirement account or life insurance policy. You may also need to create a new health care directive if your spouse is the current designated party to make health care decisions on your behalf should you become incapacitated.
If you are not already well versed in your household finances, it is time to get a handle on things. Be sure you know everything when it comes to your financial situation. This might mean sitting down with your accountant or financial advisor and even pulling a copy of your credit report. This will not only help you become fully aware of your financial status, it will help you plan for the future so that you can work toward a divorce settlement that will keep you in the lifestyle to which you have grown accustomed.
If you are considering divorce, it is important to take certain steps to ensure your financial security in your new life. While starting over after a gray divorce can be a scary thought, you can make the transition much easier by planning ahead.