I am working with more than a few clients who are in the midst of what is being called the “Grey Divorce Trend.” I never did like the word “trend” when describing a process that is so very challenging – but I have to agree that more and more, I see clients who are divorcing in later years, seeking independence and the hopes of a brighter future for those golden years.
Here’s a list of questions that I ask each of these clients to consider as we pull together their divorce financial plan. Having a solid understanding of what challenges they will face helps to guide us to create focused post-divorce investment strategies that will help secure a financially sound tomorrow.
- What about your job? Are you considering transitioning to a new career or finding a position with an existing firm? Do you have a plan for funding this transition? If you are not appropriately licensed/educated, what will it take, in terms of time, training and money to obtain the necessary certifications?
- Where do you want to live? Urban, suburban, rural? Will any of your children come with you? Or will you be helping to set them up on their own?
- Do you know what retirement plans you and your spouse have? Are there pensions, in addition to 401k’s and IRA’s ?
- Do you have a budget in mind, to meet the expenses of your new living arrangements? Do you need help in determining what those expenses are/will be?
- Is there any debt outstanding: lines of credit, credit cards, car loans, student loans co-signed?
- Will you need to take on additional debt to fund future housing and expenses, and pay for the expenses of the divorce?
- Who currently provides health insurance for both spouses? Do you know the cost? Alternatives for coverage upon divorce?
- Is there long-term care insurance for either or both spouses? Should such a policy (if currently owned, or available for purchase) be included in the settlement agreement?
- Have you considered tax consequences of many of the above items: possible capital gains on sale of either/both properties, taxes on withdrawals from retirement plans; capital gains on sale of other investments; tax deduction and liability for spousal maintenance payments? Is there a tax liability from the sale of Harry’s business which may come up in this year’s tax return?
Preparing for a divorce in later years has very specific considerations. Thoroughly educating yourself will help set the way for a brighter future to better enjoy those glorious years of independence.
