When we are young and in love, we find it difficult to relate to ourselves growing old and prefer not to think about the possibility of our marriages failing. It is easy to cast aside any misgivings about the future when we are starry-eyed and fearless. However, when we approach mid-life and face divorce, a rude awakening awaits..
A recent survey among financial planners in the US, revealed factors which would have made divorce easier for their clients, had they planned for unforeseen circumstances. The survey found that in more than 75% of Grey Divorces (divorces over the age of 50), only one partner handled their financial affairs and the other partner lacked a general understanding of managing personal finances.
The majority of people nearing retirement have not made sufficient provision in the form of accumulated savings, pension funds etc., and find themselves in a really difficult situation when they have to divide the little assets they do have, due to divorce. Many couples married without any nuptial agreement and are also not aware of the financial implications of divorce in terms of retirement planning, taxes etc. As a result, more and more people over 60 are forced to continue working to make ends meet after their divorce.
Make divorce much easier by taking these 10 steps:
- Know how to manage your personal finances.
- Understand the long-term financial planning consequences of divorce.
- Understand the tax implications of divorce.
- Increase savings for your retirement.
- Decrease your daily spending.
- Enter into a pre-nuptial agreement.
- Purchase long-term care insurance.
- Consider selling assets (including real estate) prior to finalising the divorce.
- Have power of attorney documents in place, no matter what your age.
- Prepare for the costs of professional assistance during divorce.
This applies to everyone who is about to get married, happily married, considering divorce or already in the divorce process. It is never too early to plan for your future and never too late to learn and make adjustments.
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Written by Sinta Ebersohn (Creator of fairdivorce.co.za – Johannesburg RSA)