Ending a marriage poses financial challenges at any age. But divorce may be especially complicated for couples undergoing a grey divorce. This is a divorce involving couples who are in their midlife or older.
Divorce reduces a family wealth by 77 percent, according to an Ohio State University study. In grey divorces, spouses also confront other problems because ending their marriage can take away their retirement savings or scuttle their financial plans. It becomes complicated to untangle assets that were commingled in a lengthy marriage.
Spouses should seek full disclosure throughout this process. Negotiating may also reduce costs and allow spouses to develop their own solution instead of having a court impose a decree upon them under Michigan law.
Ending a marriage does not end your relationship with your creditors. You are still responsible for mortgage, credit card, vehicle, or other payments if your name is on the account. It is important to remove your name from shared accounts if you want to be responsible only for your own debts.
It is important to update your estate planning documents such as wills or powers of attorney or your soon-to-be-former spouse may keep your authorization to make business, healthcare or other important decisions on your behalf.
Your will should also be revised to assure that your assets go to designated heirs and that you select executors and guardians that you desire. Update beneficiaries on life insurance and retirement and stock accounts to assure that their assets are not left to unintended beneficiaries.
Retirement accounts have different requirements and penalties for early termination or withdrawals. You should obtain information from the managers of your funds and accounts. If you go to court, you may have to divide retirement funds in half.
It may be less costly and easier to seek a settlement with your former spouse. A 401(k) plan or pension, for example, may go to one spouse in return for the other spouse getting other assets.
A divorce may be a good time to sell off as many assets as possible. Selling the family home can provide money, avoid the cost and difficulties of refinancing under the name of one spouse and reduce housing costs, repairs, and taxes.
Attorneys can assist couples with seeking a fair and reasonable decree. They can represent your interests in negotiations and court proceedings.