VICKIE LYNN COCHRAN attorney at law
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Yes, your divorce is going to affect your wealth

Divorcing when you are 65 is a lot different than divorcing when you are 35. For one, at 35 you might have young children and divorce means dealing with child custody and support issues. At 65, the kids are usually grown and starting their own families. Also, your list of assets is probably a lot longer than it was when you were still in your 30s. You have had an additional 30 years to build your wealth. Owning high-value assets often leads to a more complex divorce, since property division is typically one of the major sources of contention.

When it comes to a so-called "gray divorce," asset and debt division is extremely critical. If you make a wrong decision, you could end up with much less than you need to see you through retirement. Fortunately there is a whole range of people beyond your attorney that can help. Your accountant, your financial advisor and even your therapist can help you stay focused and make the correct decisions in terms of your divorce settlement.

However, it still helps to know what to expect. Here are some ways that divorce can affect your wealth.

The house

This is an important one. You might feel like you should get the house in the divorce, especially if you have spent decades taking care of it while your spouse worked. Unfortunately, your house may cost you in the long run. If you cannot afford to sufficiently maintain it or keep up with the monthly bills, it is more than likely not in your best interest to keep it. In addition, you may have to give up other assets in exchange for keeping the house -- assets that may be more beneficial to your future financial security.

Splitting joint assets

Getting divorced means dividing assets. Most of your assets are probably in the form of real estate, retirement accounts, and maybe even an oil and gas interest or two. Perhaps you and your spouse are joint owners of a company.

When you deal with these kinds of non-liquid assets, determining the value of each is very important. Neither one of you will be able to keep all of them, and to ensure you receive your fair share, it is vital that you use reliable methods to assign value. Usually, this is where a valuation expert or appraiser comes in. By hiring an experienced professional, you significantly increase your chances of walking away with a fair settlement.

Keeping your retirement intact

During a gray divorce, your main goal should be protecting your retirement plans. You do not want to find yourself in a bind ten years down the road when you have to start seriously thinking about long-term care options.

Protecting your future financial security means examining the tax consequences of every scenario. For example, you generally do not pay taxes on the money or property you receive in a divorce settlement. However, if a retirement account is part of that settlement, you may find yourself owing taxes on any distributions you receive from the account.

Gray divorce is often extremely complicated due to the assets and wealth that are subject to property division. Since the divorce will affect your finances, be sure you use every available resource to make sure you get the settlement you deserve.

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