New York Estate Planning & Elder Law Blog
Divorce is never an easy experience, no matter what age it occurs at. However, individuals going through a late-in-life divorce may be even more surprised at some of the challenges this experience can present. Many of the difficulties experienced by older individuals that make the choice to get divorced can have a significant impact on their estate plans. A recent article from Marketwatch.com provides some insight as to how a late-in-life divorce can impact your estate plan from those that have experienced it.
Difficult Job Market
While the economy may be on the road to recovery, history has shown us that can change at any moment. Even in the best of economic times, finding a job that can help maintain the standard of living you are accustomed to or want to experience can be very difficult at any age. According to individuals that provided commentary for the article, this is an exceptionally difficult task for older individuals. The problem may be compounded for spouses that have been out of the job market for a longer period of time, or who may not meet the educational requirements that many positions now demand.
A significant change in your income can have a negative effect on many of your assets. If you and your spouse divorce and choose to sell the marital home, much of the profit could be eaten up by costs associated with the divorce. Additionally, you will need to have enough income to support two separate households, and even with potential spousal support obligations having to maintain a household on one income can eat away at your savings.
Cost of Divorce
The divorce process itself can be costly, especially in a contested divorce. The more you and your spouse disagree on the terms of your divorce, the more likely costs associated with the divorce will increase. Planning for divorce often means more than just choosing a lawyer and filing the paperwork. If you and your spouse have made the difficult decision to divorce later in life, then planning for the financial costs should be something you discuss – especially since there are ways to keep the legal cost of a divorce to a minimum.
These high costs can require that you dip into your savings or even your retirement accounts. While you may plan to restore those lost assets in time, doing so could prove more difficult than many people think. Solid financial planning and ensuring you have a comprehensive understanding of you and your spouse’s financial situation can help you make smart choices when it comes to using your assets for a divorce.
Insurance Concerns
Depending on the terms of your divorce, you may also have to consider the impact it will have on your insurance. This is especially important when it comes to issues like long-term care and planning for incapacity. If one spouse suffers serious medical setbacks, the bills associated with treatment and other aspects of illness could take a significant chunk out of individual savings. That means you risk having less assets to provide for your beneficiaries.
The Bottom Line
A comprehensive estate plan is more than just some documents kept in a safe. It is an important way to protect and preserve assets that you have worked hard for in order to provide for beneficiaries. While staying in an unhappy marriage is not the answer to all of the challenges a late-in-life divorce can present, being proactive about facing these challenges is an important step in overcoming them.
An experienced estate planning attorney can help you understand how divorce – and what comes after – may impact your estate plan and can even work with you to put safeguards in place so that you can plan accordingly. While divorce at any age can pose significant challenges, late-in-life divorce obstacles need to be fully understood and considered – especially when it comes to revising your estate plan.