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Post-divorce financial planning for older adults

On Behalf of | Jun 11, 2020 | Blog, Divorce |

People in Arkansas who are nearing retirement may have been planning for that time as a couple for years, and divorce can upset those plans. “Gray divorce” refers to divorce among older individuals, and it may happen shortly before or even after retirement.

In order to maintain financial stability, those who are no longer in the workforce or whose time remaining in the workforce is limited need to understand their financial situation before and after the divorce.

Distinguishing properties

A list of assets and debts may be the first step. If property includes such assets as antiques, art and jewelry, these will need to be appraised. People should note the difference in marital and separate property.

For example, inheritances and gifts are usually considered separate property. It may also be helpful to gather financial documents, including tax returns and estate planning documents. The latter might need to be revised after the divorce is final. Retirement accounts make up a significant portion of the assets owned by some older couples, and the rules for dividing these in a divorce differ depending on the type of account.

Planning for the future

When considering what they will need after the divorce, people should think about how their lives will change. Some may want to help out children or grandchildren with costs. Others may want to travel or work to improve their community.

Couples may be able to come to an amicable agreement regarding how they will divide their property. Even those struggling with conflict do not necessarily have to go to litigation. Many couples are able to work out an agreement through mediation, which is a cooperative approach that works toward finding a solution that is acceptable to both individuals, in contrast to the adversarial approach of litigation. If going to court is necessary, an attorney may help an individual prepare.