Financially comfortable couples over the age of 50 may require comprehensive planning when preparing for a gray divorce. Dissolving a long-term marriage may result in a significant change in an individual’s standard of living.
To preserve assets, a spouse may find ways to buy the other spouse’s portion and take sole ownership of it. Divorcing couples may also declare certain items as gifts to each other. Without an agreement, however, a family court judge divides marital property by what he or she deems fair. Some of the factors a judge may consider in determining fairness include children and a spouse’s age, health and how well he or she could afford to maintain an asset or property.
Living on a single individual’s budget
After each spouse goes his or her own way, a career and the means to support a standard of living can be major factors in adjusting to a new life. An individual may, however, require alimony or spousal support payments to cover his or her housing, medical and basic living expenses.
As reported by Bloomberg, researchers found that individuals over the age of 50 could find their wealth reduced by about 50% after a divorce. Although it is not uncommon that a sudden reduction in a household’s resources may have serious effects on newly divorced adults, it appears to be much worse for women.
The men studied experienced only a 21% reduction in their standard of living, a fact that may be attributable to their ability to earn higher incomes. The women in the research study, however, experienced a 45% reduction in their standard of living after a divorce.
Preparing for a high-asset divorce
Dividing assets, property and retirement plans may help in providing a soon-to-be ex-spouse with the financial resources needed to live comfortably. The court could consider the higher-earning spouse’s income when determining the amount of alimony or spousal support he or she must provide. Preserving a family’s wealth may require careful negotiating to work out a fair division throughout the divorce procedure.