A divorce can be devastating for California residents over the age of 50. This is because it comes at a time when they should be considering retirement and setting up their estate plan.
However, in a divorce, many assets are split 50/50 between the divorcing couple. This can include many investments and retirement plans.
What’s the biggest mistake to make during the divorce?
The biggest mistake that a person getting divorced can make is not having a complete understanding of their finances. It’s all too common for a spouse who has served primarily as a homemaker to have little understanding of shared assets.
Instead, everyone should do a complete inventory of all assets. This includes retirement plans, potential investments, property and debts.
Be aware of shared debts
Many couples end up sharing a lot of debt over the course of their marriage. In a divorce, this debt is considered an asset and is split between the two people.
Not being aware of the debt or taking the debt into consideration when negotiating is a big pitfall that many older people can fall into. This goes right up there with not considering taxes and legal fees.
Figure out retirement accounts
It’s never totally impossible to split retirement accounts or get adequate compensation for your share of the retirement account. During a divorce, make sure to address any employer-provided retirement plans in order to efficiently support yourself in later years.
Other things to keep in mind
Recovering financially from a divorce at the age of 50 is hard. Not to mention all of the emotional changes that come with being freshly divorced. With all of these changes, it’s important to have a support system and do research to know what you’re getting into.