If you have been married for many years or even decades, the idea of divorce might not be on your radar. Still, an empty nest or differing goals later in life can strain a marriage. In fact, the divorce rate of those age 50 or older is climbing according to some attorneys and researchers. Those going through a late-in-life will want to pay attention to their financial situation.
Divorce can significantly affect your financial situation
Divorce can easily lead to a financial decline for both women and men. One study reported that if a woman divorces when she is age 50 or older, she could face a 45% decline in her standard of living. The study also reported that men in such situations face a 21% decline in their standard of living.
Part of the reason for this decline can be that many of these couples move from a two-income household to a single-income household post-divorce. Couples going through a late-in-life divorce may also split retirement savings that they had previously counted on to see them through the rest of their lives. And, some people, especially women, may find they have to re-enter the workforce post-divorce to make ends meet.
Preparing financially for life post-divorce
Still, if your marriage is failing, it may be better to divorce. Still, you will want to think of your post-divorce income. The financial aspects of divorce such as property division and spousal support can take center stage in a late-in-life divorce.
When it comes to property division, Michigan is an “equitable distribution” state. This means that the court will divide marital assets and marital debts in a way that it believes is fair. Sometimes, this means an even 50-50 split, but sometimes, it means one spouse will be awarded a greater share of marital assets if such a division is fair. Separate assets and debts remain the property and obligations of those who owned them prior to marrying.
Spousal support also takes precedence in a late-in-life divorce. In many marriages, there can be a significant disparity in the incomes of both spouses. Sometimes, one spouse earns much more than the other, especially if the other spouse stayed at home to care for the family rather than pursuing a career.
Still, there is a general understanding that the stay-at-home spouse makes major contributions to the marriage, and spousal support will be awarded in a way that puts both spouses on fair financial footing post-divorce.
Can I address the financial aspects of divorce proactively?
You do not necessarily need to wait for the court to make crucial decisions on property division and spousal support in the event of a divorce. While married, you can enter into a post-nuptial agreement with your spouse that details how marital property and debt will be divided and how spousal support will be paid if you divorce.
In addition, you can negotiate these topics with your spouse during the divorce process. If you and your spouse can reach an agreement on property division and spousal support during these out-of-court negotiations, you can have the court approve the settlement, making it binding.
Divorce can impact your financial situation, but it does not have to put you in dire financial straits. With planning and compromise, you can wrest control of your post-divorce finances, allowing you to make a fresh start.