Divorcing Later in Life: Important Financial Considerations to Keep in Mind

Divorcing later in life means untangling years of shared finances. In Massachusetts, assets are divided fairly, not always equally, based on marriage length, contributions, and future needs. Retirement savings, property, and financial security all require careful planning. At Reade Law Firm, PC, we help you make informed decisions to protect your financial future.

Dividing Marital Property and Retirement Accounts

Marital assets typically include homes, savings, and retirement funds. Assets acquired during the marriage are often shared, but separate property may become marital if mixed with joint accounts. Retirement funds, such as pensions and 401(k)s, require a Qualified Domestic Relations Order (QDRO) or Domestic Relations Order (DRO) to ensure tax-free transfers. Without these legal steps, withdrawing funds could trigger penalties. Making informed decisions about how to divide these assets is essential for long-term financial stability.

Alimony, Social Security, and Health Insurance

Alimony can play a major role in Massachusetts divorces, particularly when one spouse has been financially dependent. Payments may end when the paying spouse reaches full retirement age, but courts can extend support based on financial need. If your marriage lasted at least 10 years, you may be able to claim Social Security benefits based on your ex-spouse’s record. Health insurance is another concern, especially for those who were covered under a spouse’s plan. Finding new coverage, including Medicare options if eligible, is an important step in post-divorce planning.

Key Financial Decisions to Consider

Making financial choices during divorce can feel overwhelming. Here are a few important factors to keep in mind:

  • The Family Home: Selling allows both spouses to split the proceeds, while a buyout keeps one spouse in the home. Consider the costs of mortgage payments, property taxes, and maintenance.
  • Taxes on Assets: While dividing assets is tax-free, selling property later could result in capital gains taxes. Understanding tax implications can help avoid surprises.
  • Estate Planning Updates: Wills, trusts, and beneficiary designations should be revised after divorce to ensure assets are protected and distributed according to your wishes.
  • Budgeting for the Future: Adjusting to a single income may require financial planning. Reviewing expenses and setting a new budget can help create financial stability.

Mediation vs. Litigation: Choosing the Best Approach

Mediation offers a cost-effective way to settle financial matters, allowing couples to reach agreements without the stress and expense of court. Litigation, while sometimes necessary, can be more time-consuming and costly. Many divorcing couples find that mediation provides more control over financial decisions and a smoother path forward.

Take the Next Step Toward Financial Security

Later-life divorce comes with important financial decisions, but you don’t have to go through it alone. At Reade Law Firm, PC, we help individuals in Massachusetts make informed choices to protect their financial future. Call us at (978) 767-8383. Let’s discuss your options and secure your financial future.