If you and your spouse are in your middle years or beyond and facing divorce, you also face some unique financial challenges.
During your divorce, division of assets, tax considerations and the cost of living on your own rather than as one-half of a couple are matters best handled by both spouses working together.
Of assets and their taxes
The asset division phase of a divorce can be complicated and frustrating. It is a good time for teamwork. If you and your spouse can make major decisions together about who gets what, you can save time and money during the divorce. Your assets may include the marital home, vehicles, bank accounts, investment accounts, retirement accounts, Social Security benefits and more.
Remember, there are tax considerations in nearly every area in terms of property division. For example, once withdrawals begin on a 401(k), it will not be worth its face value because the IRS taxes those withdrawals.
Separate living costs
As a newly single person, you may face expenses that were not your responsibility in your married life. For example, you will either have to pay rent or mortgage payments, plus utility payments and upkeep. Once you are on your own, you may discover the high cost of health insurance, and then there are the costs of maintaining your lifestyle. You may have to trim your budget and, if retired, consider a return to the workforce to ensure an income stream.
During your marriage, you and your spouse made decisions together. Concerns about financial security may not be something you expected to deal with at this point in your life, but here it is. With legal guidance and support, you and your soon-to-be-ex can work together to create a divorce agreement that satisfies you both. Options you may consider include mediation or collaborative divorce.
Invoking the team mindset helps you find your footing as you transition to the next chapter in your life.