Some sensible tips for older divorcing parties

Here’s a divorce scenario with real-life implications in Georgia or elsewhere in the country.

In deciding how to distribute marital assets in their dissolution, a couple ultimately determines that one spouse will keep the monies saved in a retirement plan, with the other becoming sole owner of the family home. Both assets are nearly identical in value when the divorce decree is finalized.

In the years following the divorce, the retirement plan balloons in value, reaping the benefits of strong tailwinds in the financial markets. Conversely, the value of the home plummets, owing to myriad pressures in the housing industry.

The lesson to be learned here, says a divorce author and columnist writing for the financial management firm Vanguard, relates to age.

The point that Janice Green makes in a tract on financial considerations for older divorcing parties is that a relatively younger person might have ample time — that is, many years of remaining life — to simply wait and recoup the losses on the home through a resurgent market. Conversely, an older person will likely not have that luxury.

For many older parties negotiating a divorce, it might make more sense to mutually hedge their bets by each owning a portion of more than one asset. In the case of the above hypothetical, that would mean both divorcing spouses share equal ownership in both the home and the retirement account.

Green provides other tips as well that can make optimal sense for boomer-aged couples untying the knot.

Here’s one: If retirement money is being divided, the receiving spouse should ensure that a divorce is not finalized prior to an employer’s annual contribution to the other spouse’s plan.

Here’s another: If one party promises to make future payments following divorce, the promised party might want to insist that he or she remains as a beneficiary on the payer’s life insurance policy to guarantee security in the event of that person’s untimely death.

Myriad other age-related financial considerations loom potentially large for many older divorcing couples. A proven divorce attorney can help identify them in a given case and ensure that they are accounted for in the divorce process.

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