Just because a couple is planning to file an uncontested divorce in Brooklyn does not mean that financial preparation goes out the window, particularly for those in the baby boomer generation.
These are folks at the peak of their careers, perhaps nearing retirement with children in college or beyond. They may have a fair amount of acquired property, a wealth of savings in stocks or retirement accounts - all of these things need to be considered before coming to the table in an uncontested divorce proceeding. This is true even when the pair hasn't been married for decades.
Consider that just two short decades ago, Fidelity Investments tabulated that one out of every 10 people over the age of 50 was filing for divorce. Today, it's one out of every four.
Women in particular may be the hardest hit if proper planning isn't involved. The fact is that a divorce at any age can be a significant blow to the finances, as well as the heart, those who are nearing retirement or who haven't been in the workforce for many years may find themselves facing financial insecurity. This is especially true if one party was the dominate one in making financial decisions.
One of the first things we often recommend in these cases is obtaining a full, clear picture of the couple's finances. That means looking at not just the bank accounts, but the retirement and brokerage accounts as well. It also means pulling both credit scores. What some fail to consider is if one person was handling the majority of the finances, putting most of the bills in their own name, the other person may have a lower overall credit score, even if they were contributing equally to the payments.
Sometimes, it may also be worthwhile to consider having personal mail forwarded to a separate post office box so they can make sure that the information they are gathering is all received and accurate.
Both parties, regardless of their roles in the relationship, should probably begin to work on compiling an emergency savings. This is often a step that can be taken prior to filing. This will help both parties not only pay for whatever costs they may incur during the divorce, but also cushion the blow for unexpected expenses that may arise afterward.
Another matter that we see creating a lot of tension between long-married spouses is the house. People become very emotionally attached. This is understandable. However, it's important to keep a cool head in such matters. The asset may not be worth it to keep, especially if your income will be essentially halved. Beyond just the mortgage payments, will you be able to keep up with the maintenance? And if you do think you might want to sell it when you enter retirement, is it going to be worth less than what you owe? If so, you may want to consider selling now so that you can both split the deficit.
A spouse who didn't work for most of the marriage is probably going to endure a tougher transition, but there are ways to bridge income gaps if you are smart about it. Your divorce lawyer can help you to negotiate a health insurance benefit plan that your ex-spouse pays as part of the divorce agreement. There may also be ways to divvy up the debt so that you aren't burdened with more than you can handle.
Just because a divorce isn't contentious doesn't mean there aren't a lot of details to sort out. We can help.
If you are contemplating an uncontested divorce in Brooklyn, call our offices at (718) 864-2011.
Divorcing Baby Boomers: How to Get a Financial Grip, April 30, 2014, By Donna Fuscaldo, FOXBusiness
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