On behalf of Stange Law Firm, PC posted in Family Law on Thursday, October 5, 2017.
Older Missouri couples who are facing divorce may be concerned about their retirement savings. The divorce rate for people 50 and older has gone up about twice as much compared to the 1990s, but older people may also be particularly vulnerable financially. They may have fewer employment opportunities and less time to rebuild assets lost during the divorce.
There are also certain financial mistakes some people make that can worsen the situation. For example, some of the decisions people make during property division are driven by emotion. One of those decisions might be to keep the family home in lieu of other assets. The problem is that it could decline in value. This happened to a woman who gave up her 401(k) and had a good job but developed a health problem. She had to retire early and eventually lost the home. However, couples who decide to sell their home will face obstacles as well. Inspections and upgrades necessary for the sale can be expensive.
Failing to accurately calculate the value of accounts when taxes and penalties are considered is another error. For example, liquidating a brokerage account could trigger a long-term capital gains tax. Traditional retirement account and 401(k) withdrawals are subject to income tax.
Whatever the age of an estranged couple, they might want to first try mediation or a collaborative approach to the divorce. In some cases, this can save time and money. Negotiating a settlement also gives a couple more control over the outcome. However, some people might find themselves fighting to protect their financial interests. A postnuptial agreement could be challenged. If one spouse is uncooperative, litigation may be unavoidable. People may want to discuss their goals with an attorney before proceeding.
