The importance of advice: Managing financial impact of a late-in-life divorce
Those who divorce after the age of 50 often face financial hardships since the Great Recession destroyed significant amounts of baby boomer wealth.
Earlier this year, the SFGate.com website published an article noting that 1970's pop stars Darryl Dragon and Toni Tennille-best known as the Captain and Tennille-were splitting after nearly 40 years of marriage. Dragon and Tennille explained to their fans that people "naturally evolve over time" and, sometimes, hidden feelings "start to be uncovered." The author of the article observes that there has been much speculation about why so many aging baby boomers seem to suddenly be interested in obtaining a divorce. Some have said that the cultural upheavals that the baby boomer generation experienced in their youth have been a marital destabilizing factor. In any event, boomers are getting divorced in record numbers for their age group.
According to the California Bar Association, when you are at or approaching your senior citizen years, you may have "more at stake" when you change your marital status than younger individuals. The divorce of a baby boomer couple can have serious financial ramifications. An article published on the Go Banking Rates website says that, thanks to the economic downturn which began in 2007, baby boomers have taken a significant financial hit to their retirement savings. Job losses, children's college costs, plummeting home values and caring for elderly parents have all taken their toll on baby boomer finances.
AARP finds that, given today's economy, older adults are often financially vulnerable and a late-in-life divorce does not help matters. A California CPA was quoted as saying that, if you are an older person getting a divorce, you end up with only half of what you had when you were married and that half doesn't feel like that much anymore. If a late-in-life divorce occurs, there is less time remaining in one's life to recover financially, retire credit card debt, and make wise investments that will grow. Because they failed to save enough money or make prudent investments, many baby boomers getting divorced today may no longer find that they have the resources to retire when they had planned to.Community property division
Since the state of California is a community property state, the marital property and assets of two spouses are-typically-split evenly in a divorce or separation. The California Bar Association observes that, broadly defined, community property consists of all property that you and your spouse have acquired through labor or skill during the marriage. Indeed, you and your spouse may have more community property than you realize. In addition to furniture, automobiles and one or more homes, you may have an interest in pension and profit-sharing benefits, stock options, or a business owned by one or both of you.
It is not always easy to evenly split marital property as matters often tend to get complicated where business interests and complex assets are at stake. Sometimes, the proper and fair valuation of assets tends to be an issue which becomes complicated and leads to fierce disagreement among the spouses. If a divorcing couple is over 50 years of age, it is vitally crucial that the division be done correctly and fairly.Seeking advice
Divorces involving couples over 50 years of age are increasingly common in this country.
If you are confronted with a late in life divorce, you should contact an attorney experienced in handling divorce cases. An attorney who offers extensive divorce planning services will enable you to better weigh your options in situations where asset valuation will be a contested issue or where complex assets are at stake.