Divorce continues to be on the rise for those approaching retirement. According Pew Research Center; the rate of divorce for adults ages 50 plus has doubled in the past 25 years and continues to grow.
Going through a divorce, at any age, can be emotionally unnerving and affect your ability to think clearly. Since you can’t escape being involved, make every effort to be prepared for your legal counsel. A good place to start is to research your resident state laws as they relate to the dissolution of marriage. Then review the following seven considerations, for the purpose of helping you prepare yourself, before meeting with your divorce attorney.
1. Do not rely totally on your attorney. It is important that you be attentive to the process. Attorneys are people, too, and they sometimes make mistakes and could inadvertently make a material omission. I am reminded of a woman whose 401(k) was not added to the total assets to be divided, because her soon-to-be ex-husband’s attorney, forgot to request the information; it was left out of the settlement agreement. That is a significant oversight which could work for you or against you, depending on what side of the fence you are on.
2. Create an inventory of all assets, before meeting with your attorney. Identify what assets are held jointly and what assets are held individually. Be mindful of any inheritance received over the years that you may have co-mingled in a joint account; bring this to the attention of your attorney. Generally speaking, inheritance is not subject to division and is usually considered sole and separate property. Your attorney will advise you of the applicable law as it relates to the laws of your resident state and your specific situation.
3. Past employment records are important. Create a detailed list of all present and past employers of both spouses. Check with former employers, as well as current employers, for any pension money that you may be entitled to from employment that occurred during the early years of the marriage. It is not unusual to have forgotten money from a pension, profit sharing, defined-benefit plan, deferred compensation plan or stock options.
4. If you are entitled to alimony ask how you will be protected if there is; job loss, lowered income, disability or death. Where will the resources come from to honor your agreed-upon settlement? If you are advised that there is insurance coverage; request a copy of the insurance contracts and review them carefully. Consider negotiating a lump sum settlement versus monthly alimony. This one consideration could keep you from experiencing a break in your expected monthly alimony payments, should your ex-spouse fall on difficult times financially.
5. Life insurance. This is a very important issue. If the ex-spouse, who is responsible for making alimony payments, dies following the divorce, during the alimony payment period, it could be catastrophic financially for the recipient ex-spouse. To avoid any potential hardship for the alimony recipient, request that you be named both owner and beneficiary of the insurance contract. This will put the premium payment responsibility into your hands, thus giving you total control over the continuance of the insurance contract. The expense of the life insurance premium is usually arranged as part of the settlement agreement.
If the procurement of life insurance is not possible due to health reasons, then be sure to get a satisfactory answer to this question; how will your settlement be paid in the event of the death of your ex-spouse?
6. Social Security benefits. Many divorcées are unaware that they may be eligible to collect on the Social Security benefit of their ex-spouse; as long as they were married for 10 years or more. It doesn’t matter if your ex-spouse has had multiple marriages or is currently remarried and is collecting a retirement benefit. If each marriage lasted 10 years, then each and every ex-spouse can collect a benefit. And no, the ex-spouse will not be made aware of anyone collecting based on their benefit — that will be between you and the Social Security Administration. Do your research; check with the Social Security Administration — or for independent additional research regarding your Social Security options contact Social Security Choices at — www.socialsecuritychoices.com.
7. And lastly; be sure to change the beneficiaries and titles on all your accounts.This is sometimes neglected following the divorce process. I met a gentleman who had been married to his second wife for 15 years and the first wife was still on the title of the primary residence.
Divorce is never easy; there are a lot of moving parts to attend to, not to mention the increased stress and emotional toll it can take. Protect yourself by being well organized and thorough in your planning.