A study released a couple of years ago brought attention to the fact that the divorce rate amongst Baby Boomers was on the rise. This group has experienced almost double the divorce rate in current years compared to reported numbers from the 1990s.
Reasons for the decision to divorce later in life vary. A recent article published by CNBC notes that some couples in this situation cite the fact that they grew apart while focusing on raising children and no longer have common interests with their partner. Others look towards retirement as an opportunity to do exactly what they want to do instead of trying to appease a partner.
Regardless of the reason behind the decision, those who divorce later in life can face unique financial challenges. Two specific surprises to watch out for when attempting to divide property during divorce include:
- Additional familial obligations. Baby Boomers are also referred to as the sandwich generation. Many in this group find themselves not only helping parents with difficulties that may come with age, but also opening their homes back up to adult children who are struggling to find their way in the world. These additional familial obligations can put a stress on finances.
- Penalty fees. Splitting retirement assets is particularly difficult. Some require special documentation such as a qualified domestic relations order (QDRO); others must choose a transfer date carefully to avoid getting hit with unintended tax penalties and fees.
Determining the best split for these assets is difficult. These are just two of the many potential issues that can arise during the property division determination portion of the divorce—which is just one component of the divorce. As such, it is wise to seek legal counsel. An experienced property division attorney can advocate for your interests, better ensuring you get a fair financial settlement.