Gray Divorce - Part II
Untangling Finances.
In our Gray Divorce- Part 1 post, we mentioned unique concerns presented to folks in a Gray Divorce compared to those divorcing at earlier stages in life. If you haven’t read that post yet, it can be found here. In this post, we will dive deeper into untangling your finances in a Gray Divorce.
The longer a couple is married, the more intertwined their finances generally become. Separating these assets equitably means that spouses must consider potential tax burdens, cost-basis implications, and potential market changes on investment and retirement accounts. Because spouses in Gray Divorce are retired or rapidly approaching retirement, it is that much more important to make careful decisions about how these accounts are divided.
Another key consideration in untangling your finances is how each spouse will be able to cash flow their lives post-separation. The questions abound:
- Will I still be able to retire at the age I was imagining if I have to share my retirement with my spouse?
- Will I be able to afford to retire?
- Will my spouse want me to pay spousal support for so long that I’ll have to work until I’m 90 years old?
- Will my spouse want me to return to (or start for the first time) work outside of the home after raising children for the last 25 years?
- How do my spouse’s social security benefits impact me?
- Will make spouse take part of my social security benefits?
- Will I have to start withdrawing on my 401K/IRA earlier than I’d planned?
While these are heavy questions and concerns with complex answers, they are also issues we have a lot of experience with navigating. A Collaborative divorce provides a confidential space to resolve these complex issues. In some cases, we even work with third-party neutrals like financial planners and CPAs to help us problem solve and avoid various financial pitfalls. In a Collaborative divorce, these third parties are truly neutral, such that both parties can utilize their expertise, share in the cost, and receive consistent information. In addition to third party neutrals, the Collaborative process also encourages creative solutions that actually work. Because what is the point of any solution if it doesn’t work for you?
The reality is that many Gray Divorces are far more complex than our courts have the bandwidth to fully address, which can often lead to judges handing down rulings which divide a coupe’s assets in a way that isn’t realistic or feasible, or that possibly sets one spouse up for financial hardships in the future. On the other hand, the Collaborative process gives couples the opportunity to work through the logistics of possible solutions in order to arrive at a creative, workable agreement that is specifically tailored to them.
You can read a bit more on the Collaborative process here and here.
If you’d like to know more about Gray Divorce, please call Gondring Law at 336.724.4488 or email us at info@gondringlaw.com.
