Divorces affecting people age 50 or older are often referred to as gray divorce. According to Kiplinger, these situations are far more complex when it comes to finances. This is especially true when older couples have accumulated a fair amount of wealth during the relationship.
Due to the complexity of gray divorce, it is important to prepare yourself for the process. Here are a few key points to keep in mind if you are thinking about ending your marriage.
Review beneficiary designations on certain accounts
Life insurance policies and bank accounts have beneficiary designations, which allow you to name an heir directly on the policy or account. These designations supersede any information contained in your will or trust, which can result in a contentious court battler if the two conflict. It is common to name a spouse as your beneficiary, so you must review these documents along with the rest of your estate plan during a divorce.
Take a thorough inventory of your assets and debt
Long relationships involve lots of intermingling of finances. As a result, it is far more difficult to determine what is a shared asset and what is a separate asset. That is why you should take an in-depth accounting of everything you own and all your debt to determine where you stand. You should also take an accounting of your spouse’s assets and debt to have a full picture of the total value of your estate.
Keep less common assets in mind
Things like pensions and annuities may also count as marital property during divorce. These assets are also tougher to divide due to tax issues and restrictions on the withdrawal of funds. Make sure you understand the full value of less common assets and have all the necessary paperwork if they are in your name.
The end of a long relationship is always fraught with emotion. However, navigating a gray divorce carefully can result in a new lease on life once the dust has settled.