Divorce over 50, also known as gray divorce, has become increasingly common in recent years. According to a study by the Pew Research Center, the divorce rate for adults over 50 has doubled since the 1990s. This is the only age range where we’re seeing an increase in the percentage of marriages that end in divorce.
The increase in gray divorces has also increased the need for qualified and knowledgeable gray divorce lawyers who understand the challenges these clients face. Attorneys must understand the financial implications of a divorce on folks who may have accumulated decades’ worth of assets and debts. These individuals often have existing estate plans that will need to be adjusted during and after their divorce.
If you’re getting a divorce at 50 or later in life, here’s what you need to know about gray divorce and estate planning. Ignoring these tips are 3 mistakes to avoid.
Update your will and other estate planning documents
One of the most important things to do when going through a divorce after 50 is to update your estate planning documents. This includes your will, trusts, and any powers of attorney. You may want to remove your spouse as a beneficiary or executor, and designate new beneficiaries and executors. If you have minor children, you’ll also need to update your guardianship designations. It’s important to work with an experienced estate planning attorney who can help you navigate these changes and ensure that your wishes are properly documented.
Consider the tax implications of your divorce settlement
When dividing assets in a gray divorce, it’s important to consider the tax implications of your settlement. For example, if you receive alimony as part of your divorce settlement, you’ll need to pay income tax on that money. On the other hand, if you receive a portion of your spouse’s retirement account, you may need to pay taxes on those funds when you withdraw them. Estate planning attorneys and financial advisors can help clients over 50 understand the tax implications of your divorce settlement and develop a plan to minimize your tax burden.
Don’t forget about retirement accounts
Retirement accounts are often a significant asset in gray divorces. If you’re receiving a portion of your spouse’s retirement account as part of your divorce settlement, it’s important to make sure that your beneficiary designations are updated accordingly. You may also want to consider rolling over your portion of the retirement account into an individual retirement account to maintain control over how the funds are invested and avoid early withdrawal penalties.
Edina Divorce Lawyer
If you’re getting a divorce after 50, it’s important to work with an experienced estate planning attorney who can help you navigate the complexities of gray divorce and ensure that your wishes are properly documented. By updating your estate planning documents, considering the tax implications of your divorce settlement, and not forgetting to update beneficiary designations on retirement accounts, you can protect your assets and ensure that your legacy is preserved.
Edina gray divorce attorney Beth Barbosa has experience in both family law and estate law. She understands the challenges you face as you sort out your finances during your gray divorce. Submit your information to schedule a free consultation with Beth.