Divorce is difficult at any age, but it seems that now more than ever, adults over 50 are going their separate ways. Pennsylvania residents may be interested in a report on this trend that states most women are no longer dependent on their husbands for financial well-being in the retirement years, as most women are in the work force and have been able to build their own nest eggs. When dependent children are no longer in the picture, more and more older adults are no longer feeling the need to stay with their spouses. Even if each spouse earns a healthy pay check, there still will be financial consequences to a divorce that will need to be addressed.
The report addresses some mistakes many couples make in their divorce proceedings that can be avoided with proper planning. One is keeping the house in which the couple lived. Instead of two people paying for taxes and upkeep, that duty will fall to the one person and the one pay check that ends up with the house. Both spouses will also be held liable for any debt accrued during the marriage, so running a credit report on what is owed by both will reveal exact creditors and amounts due that can be dealt with in the divorce settlement.
Taxes, retirement accounts and health insurance premiums will all play a large part in many of the financial decisions that have to be reached. Alimony is considered under state and federal law to be taxable income, so tax brackets may be affected with the receipt of the payment. If retirement funds have been put into an IRA, an early withdrawal, even for reasons of divorce, can exact a penalty. There are options on how to handle health insurance, but premiums will most likely be higher than before the divorce.
No matter what the age of a couple, these and other financial considerations will need to be sorted out during the divorce process. Very often it can be difficult to know which options to choose. It may be beneficial for a Pennsylvania resident to have a legal adviser who will be able to impartially oversee the details during this extremely stressful time.
Source: investopedia.com, “Divorce Over 50: Seven Mistakes to Avoid“, Catherine Fredman, Accessed on Mar. 1, 2016