PLANNING FOR DIVORCE
Fights and Fees can be reduced or eliminated
Divorce is booming among baby boomers these days. According to the National Center for Family & Marriage Research, while the overall divorce rate has declined in the past 20 years, divorce for couples over 50 has doubled during that same timeframe.
A recent SmartMoney.com article provides some estate planning tips for those who are divorcing later in life:
Understand the true value of retirement accounts. Older couples that are divorcing need to review their retirement accounts in terms of value, not the balance currently in those accounts. Because retirement savings are taxed upon withdrawal, the value is only about 65 percent of what the statement says it is. This review is especially important for couples divorcing in community property states like California, where assets are usually divided equally – if one of you takes the house and the other one gets the retirement accounts, it may not be equitable over time.
Don’t undervalue Social Security. If you were married for more than 10 years, your ex-spouse has a claim to your benefits after age 62, which should be considered in alimony and asset division negotiations.
Don’t overvalue alimony. Counting on monthly payments from an ex-spouse after age 50 gets riskier with each passing year. To protect alimony payments, you may want to get a life insurance policy on your ex.
Consider the kids. Even if the children are long gone, you will still want to consider estate planning tools to protect their inheritance. You can create a lifetime asset protection trust that will protect assets for your children in case of any divorce – yours or theirs.
Call us first, if you’re going through a life-changing event like a divorce.
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