According to researchers, the divorce rate for America's baby boom generation has quadrupled over the past two decades. One byproduct of that trend has been a sharp rise in the number of divorce cases in Tennessee and other states that involve substantial retirement holdings, complex financial considerations and difficult legal questions related to property division and tax law.
On a personal level, and keeping in mind that divorce isn't an easy process to go through for anyone at any age, couples who end their marriages later in life often experience added anxiety about financial security in retirement.
Those concerns are justified. Divorce always leaves each spouse at least a little worse off from a financial perspective. Sometimes a lot worse off. And while some couples have accumulated enough assets to make this a non-issue, a favorable divorce property settlement is the best hope most people have for avoiding consequences that could seriously impact the quality of their lives in retirement.
The good news, according to experts consulted for a recent Huffington Post article, is that most people should be able to achieve this goal with the help of experienced attorneys, mediators and financial planners.
One important step is to create a new long-term financial plan that accounts for the financial effects of the divorce. While this may mean spending less, working more, budgeting and/or reallocating investment holdings or savings, the retirement benefits of this course of action will almost always outweigh the inconvenience of short-term sacrifices.
Asset protection is also an important consideration, even though it tends to be less of a problem in long-term marriages. With that in mind, it is often prudent for people to keep a close eye on retirement funds, pension accounts, investment holdings and other assets during the divorce process.
Third, remember that an equitable division of your marital assets and debts can be accomplished in many different ways. In consultation with your attorney, consider what kind of property division split will be best for you. For example, you may be legally entitled to half of a particular investment account but it may make better sense to trade that asset for a different one, such as larger alimony payments or a larger alimony tax deduction.
Lastly, whether a marital estate is large or modest, review any existing estate planning documents, insurance policies and other legal documents created during the marriage and revise them, as appropriate.
Source: Fox Business, "Graying Divorces: What Boomers Need to Know to Protect Their Assets," Andrea Murad, May 25, 2012