Spouses completing gray divorces in Texas must be careful to plan financially, track marital assets, weigh hidden costs and seek their due share of assets.
As some people in Burleson have learned firsthand, gray divorce, or divorce after the age of 50, can have devastating financial effects. According to The Chicago Tribune, one recent study suggests that gray divorce even introduces a substantial risk of impoverishment. While just 4 percent of married couples over age 62 live in poverty, 14 percent of divorced men and 30 percent of divorced women do.
Given these troubling facts, it is essential for couples going through gray divorces to appreciate the potential financial consequences. Fortunately, by taking the following steps, these couples may be able to significantly reduce their risk of experiencing financial strife after gray divorce.
1. Start planning early
USA Today states that it’s crucial for divorcing couples to reevaluate their living and retirement expenses immediately and start planning accordingly. To overcome financial losses that result from divorce, many older adults may either need to return to work or lower their living standards. Spouses should know what to expect early on so that they can realistically present their needs in family law court and pursue an appropriate settlement.
2. Accurately inventory assets
The Chicago Tribune notes that many older couples divide responsibilities so that one spouse is largely uninvolved in the marital finances. During divorce, however, it is important for both spouses to be familiar with all marital and separate property that the couple possesses. This is especially true in Texas, since judges in the state use community property laws when dividing marital property.
Under these laws, any property aside from gifts and inheritances that a couple secures while married is considered community property. This property is subject to equitable distribution between both spouses. Family law judges use several factors, including each spouse’s assets and income, to decide what constitutes an equitable division. It’s essential for spouses to make sure all separate and community property is accounted for so that a fair division can be reached.
3. Understand true value
Spouses should also evaluate the true value of various marital assets. U.S. News notes that certain assets, such as the family house, may seem more desirable to some spouses. However, pursuing these assets may actually be disadvantageous, as they may introduce liquidity issues or even hidden upkeep costs.
Spouses should additionally consider the tax implications of various forms of property or compensation that may be awarded during a divorce settlement. These include spousal support payments, retirement accounts and real property. Spouses who do so will be better prepared to assess the real worth of a proposed settlement.
4. Seek a fair share
Finally, spouses should make sure to pursue an adequate amount of property and alimony. Many spouses may struggle to make financial decisions while dealing with depression, anxiety and other divorce-related emotions. Additionally, some spouses may worry that prolonged litigation will create more costs than it recoups. However, according to The New York Times, older spouses who overlook or fail to pursue assets may lose tens or even hundreds of thousands of dollars in the long run.
To reduce the risk of such adverse financial outcomes, people in Texas who are divorcing later in life should strongly consider consulting with an attorney. An attorney may be able to help a spouse protect his or her rights and seek a settlement that protects the spouse’s interests after the separation is complete.