I’m a Divorce Attorney: 5 Ways To Protect Your Assets If You Divorce After 50
Written by
Sean Bryant
Edited by
Jenna Klaverweiden
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More couples are divorcing after age 50 than ever before. While divorce rates have declined among adults in their 20s and 30s, the divorce rate between 1990 and 2010 doubled for couples over 50. In 2019, 36% of all divorces in the United States were among adults 50 and older.
While divorce at any age can be complicated and financially taxing, divorce after age 50 can be financially devastating. After many years of marriage, you likely have intertwined finances, property and/or assets. These can be difficult to split during a divorce. Plus, at age 50, you’re likely preparing for retirement, and divorce at this stage can shatter retirement plans.
If you are over 50 and planning for or are in the middle of a divorce, here are five ways to protect your assets.
Hire a Good Divorce Attorney and Financial Advisor
A good divorce attorney can help you through a divorce. The attorney should prioritize protecting your assets but also advocate mediation or collaborative divorce litigation, which are best for your mental health and finances. The attorney should also be a good fit for your personality since you will work closely with them on intimate matters in the divorce.
Seeking the help of a financial planner can be beneficial for protecting your assets and securing your future. A financial planner can provide you with a clear picture of your financial life after the divorce and help you create a solid financial plan. Their insights can be useful during the divorce proceedings to consider asset division, alimony or spousal support, and tax implications.
“Avoiding litigation is not just about saving on legal fees — it’s about preserving your financial portfolio and emotional health,” said Erin Levine, an attorney and the founder and CEO of Hello Divorce.
“Courts often split assets down the middle, which might not be the most beneficial arrangement. Working with a Certified Divorce Financial Analyst (CDFA) can help craft a settlement that is attractive to both parties, balancing short-term needs with long-term financial growth,” she said.
Take Inventory of Assets and Debts
With your divorce attorney, you should gather a complete inventory of your joint and individually owned assets and debts. You should make copies of loan statements, credit card account statements, home equity lines, past tax returns, business debts, etc. You should also understand what nonmarital assets you and your partner have. Nonmarital assets are those that belong to only one spouse, like property bought before the marriage, inheritances and gifts that were given specifically to one spouse and not the other.
Open Accounts in Your Name Only
If you don’t already have accounts in your name only, this is the time to open some. It is important to have your own credit history that isn’t tied to your spouse in case you need a car loan or mortgage later. Plus, many lawyers advise freezing or closing joint bank accounts and credit card accounts during the divorce process.
Change Your Will and Other Documents
You should adjust your will during the divorce process or immediately upon its settlement. Your former spouse was likely an important part of your will, so you should adjust it accordingly. In some states, former spouses are automatically excluded from serving as trustees or estate administrators and receiving under your will.
You should also update other important documents, such as your healthcare proxy, power of attorney and retirement account beneficiaries.
Where You Live Determines How Your Assets Are Split
Marital assets include investments, joint real estate, savings and retirement accounts. How those marital assets are divided will depend on where you live. There are community property states and equitable distribution states.
In community property states, whatever assets you obtain or accumulate during the marriage will be split equally, roughly 50-50. Any assets you or your spouse brought into the marriage are excluded from this equal split. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
In equitable distribution states, the court will divide marital property in a manner it considers fair, based on each spouse’s overall needs and particular circumstances. The assets may not necessarily be divided equally.
Retirement accounts, such as 401(k)s and IRAs, can be considered marital property, even if they are under only one spouse’s name. This could be a crucial issue for couples going through a divorce in their 50s if one spouse has a substantial retirement account but the other does not. The larger retirement account may need to be redistributed, resulting in smaller retirement savings than initially planned.
“When dividing retirement assets, opt for percentages rather than fixed dollar amounts to account for market fluctuations that could occur during the divorce proceedings,” Levine said.
“This method ensures a fair division reflective of the account’s value at the time of actual division, not just when the agreement is made. Tools like a Qualified Domestic Relations Order (QDRO) can facilitate these transfers efficiently, minimizing tax implications,” she said.
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