Divorcing over 50, sometimes called a “gray divorce”, comes with some unique challenges. While divorce is rarely easy, without careful planning and sound legal advice, going through a divorce after decades of marriage can take a significant toll on your emotional and financial health. Therefore, planning for this difficult and life-altering event is important to help alleviate stress. Knowing what to expect, and choosing the right divorce attorney to look out for your interests, will also allow you to approach your future with confidence.
If you are divorcing over 50, here are five (5) helpful tips to keep in mind as you prepare for this new chapter in your life.
Tip #1: Have a clear understanding of your financial situation is critical when divorcing after 50.
In a gray divorce, it is not unusual for one spouse to be solely responsible for handling the marital finances. If one spouse has been earning more than the other, what do you do? One of the most common concerns faced by clients divorcing in their 50’s is surviving financially after the divorce. You will want to know whether you will be able to receive or be required to pay spousal maintenance (often referred to as alimony). If you are divorcing in Chicago, Illinois law controls if there is an amount of maintenance to be paid and if so, the amount and duration are determined based on the income of both parties and the length of the marriage. Illinois statutory guidelines dictate that the amount awarded is typically 30% of the paying spouse’s gross income and less than 20% of the receiving spouse’s income. The duration for which the spousal maintenance is paid is dependent on the length of the marriage. This will ultimately give you a good gauge of your financial situation so you can determine if you will need to find yourself a job or a different job as well as determine if your post-decree situation would be sustainable for you.
Tip #2: Be sure to plan for health insurance post-divorce.
Planning for the cost of health insurance after divorce is often one thing many going through a divorce do not think about. If your spouse’s health insurance policy has covered you up until now, you could be in for an expensive surprise. A spouse can only cover you as a dependent spouse if you are a spouse, once the divorce is final, you are no longer a spouse and coverage, by law, changes. As a result, it is important that you explore other options for your own health insurance coverage and budget accordingly — especially if you divorce before Medicare is able to cover you at age 65.
To get you started, here are three options that you may consider. One, if you currently work, have your employer cover your health insurance. Two, sign up for your state’s healthcare exchange under the Affordable Care Act. And three, you can continue to use your ex-spouse’s existing coverage by obtaining temporary COBRA coverage for up to 36 months. However, even if you choose to stay under your spouse’s coverage, the cost for COBRA coverage will most likely be significantly more than it was prior to divorce — so be prepared for that cost.
Tip #3: Think about whether you would like to keep the marital home.
While deciding whether or not you would like to keep the family home after the divorce, consider your finances. It may be your safe place and your refuge, but the marital home may come with significant financial burdens that may become overwhelming with only one person paying for the mortgage, property taxes, etc. If one spouse wants to stay in the home, you must be prepared to pay the other their share of the equity by giving up a share of the marital estate or taking on debt by refinancing the mortgage on the house to remove the other’s name from the mortgage and title.
Tip #4: Create a detailed inventory of all of your assets and debts.
It is imperative that you take a thorough inventory of all marital assets before attempting to divide them. First, have a solid idea of how much money is in investment accounts, savings accounts, retirement accounts, life insurance policy, pension plans, Social Security benefits, and real estate. When you are accounting for all the assets, make sure to also create a post-divorce plan that shows not only just the current value of assets and income but also the potential future value. It is important to take into consideration how the division of assets may be affected over time. Second, be sure you are aware of all debts – whether consumer debts, personal loans, lines of credit, etc. If you have not handled the finances in your marriage you will want to find out if your spouse has obtained any credit cards that you are not aware of. Keep in mind that you could potentially be liable for half of your spouse’s debt — even if the debt is not in your name. Make sure to get a full credit report for both you and your spouse so that there are no surprises about who owes what.
Tip #5: Be sure to include unique items and collectibles when doing an inventory of marital property.
When couples have been married for decades it is not usual for one or both spouses to accumulate some unique items or collectibles. Collections of all kinds can spark added discord, especially when money has been spent over the years accumulating unique assets or collectible items. Be aware, these items may be worth a lot of money. There are also situations where only one spouse is fully aware of the real market value of a unique asset or collectible item. Therefore, some items may require an appraisal to determine true fair market value. Do not divide collectibles and works of art until you get the items valued properly.
Seek Advice from an Experienced Divorce Attorney When Divorcing Over 50
Oftentimes, people going through a divorce will focus on the sole idea of winning. The reality is that divorce is not a game to be won. Instead, decisions should be made with a clear and rational state of mind. Don’t waste your energy, time, and money fighting, and try approaching this challenging situation with grace. If you are facing the challenges of divorce after 50, Anderson and Boback can help. For more than 20 years, our experienced divorce attorneys have been representing Chicago clients with a wide range of family law and divorce issues, including divorcing over 50. Contact us today for a confidential consultation and learn more about protecting yourself and your assets in your divorce.