Baby boomers - or those that are nearing retirement age - are setting a major trend in the divorce arena. Amidst declining divorce rates for most age groups, late-life divorce rates have doubled over the last two decades. Most feel confident about their decision, and many separate on surprisingly good terms. Yet there are still risks associated with these late-term divorces. One of the biggest is the potential for a financial disaster for one or both parties. If you are planning on filing for divorce, the following information can help you understand how to reduce this risk.
Divorce is More Complex Than Most Realize
While most couples have gone through at least one major financial transaction in their lifetime, moving to another state or purchasing a new home pales in comparison to divorce because. Divorce touches every aspect of your life. It can impact your credit and ability to obtain financing. Your car insurance policy, health insurance policy, and renters/homeowners insurance must be changed. Bank accounts, retirement accounts, and other financial accounts are impacted as well. Depending on whether you plan to go through a name change, you may even be changing your driver’s license, social security card, and other legal documents. Indeed, divorce is likely the most complex financial transaction in existence.
A Closer Look at the Potential Risks
Most couples financially plan for one home, one set of bills, and one set of expenses during their retirement. If the couple then divorces, their assets are then equitably split. For younger couples, this may not be too much of an issue. After all, they still have time to recover from the financial hit of divorce. Later-life divorcees are different, though. They face an overall combined living cost increase of about 30 to 40 percent, but now each only has a portion of their previous savings. An inability to work or a limited time to work and recover their losses can further increase the risk of financial devastation for those pursuing a late-life divorce.
Mitigating the Risks During Your Divorce
While little can be done to eliminate the increase of expenses and decrease of income, there are things that late-life divorcees can do to mitigate the risks of divorce-induced financial problems. Divorce planning, which involves a careful review of financial income, assets, and expenses, can help. Your personal plan will vary, based upon your circumstances, but some examples of how parties have mitigated the devastation of divorce include:
Dedicated to protecting your best interest, Mevorah & Giglio Law Offices can evaluate your situation and assist you in coming up with a divorce plan that can hopefully meet your needs. Learn more about our comprehensive and personalized services by scheduling a free consultation. Call our DuPage County divorce lawyers at 630-932-9100 today.
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