Without a doubt, a marital breakup is one of life’s most difficult experiences. In one particular demographic, the rate of divorce is skyrocketing. In what has become known as gray divorce, more and more older adults in New York and across the country are deciding to end their marriages. Divorce can be stressful at any age, but those who divorce later in life can be faced with unique financial challenges. Here are some things to keep in mind for older adults going through a high-asset divorce.
The home is often one of the largest assets in a marriage. If the home is sold, proceeds are usually split between parties. If keeping the home is desired, be sure to consider the tax implications and the cost long-term, as it can get fairly expensive. Also, retirement savings and accounts will likely take a big hit in a gray divorce. This is because most financial planning prior to the split was aimed at covering the living expenses of a single household.
In a divorce, any retirement accounts, such as IRAs, 401(k)s and HSAs, will be divided among the ex-spouses. How these are divided will depend on the state. Many states follow a community property standard, which means these accounts are split 50-50. However, the state of New York follows equitable distribution rules, which means the division is intended to be fair, though not necessarily equal.
The dissolution of a marriage always presents financial issues, especially later in life. For individuals in New York who are going through or anticipating a divorce, it is recommended to meet with an experienced legal representative. A knowledgeable attorney can provide much-needed guidance during this confusing and stressful time.