Divorce in California can be challenging no matter how old you are or the time you’ve been together. However, if you are over 50 years of age, separating after a long-term marriage is fraught with complications that you must address carefully and patiently. Here are some of the main concerns you should look into.
Splitting assets in California
Dividing assets in a gray divorce is a tricky issue because you may have amassed a significant amount of wealth in the various ventures you’ve explored over the years, and most of your separate properties have intertwined. And given that California is a community state, you must divide all assets you both acquired during the marriage equally. This includes stocks, art collections, bonds, and executive compensation, among other things.
Retirement planning, alimony, and taxes
Retirement funds and alimony are some of the most important assets gray couples own. You need them when you can no longer work, for your daily needs, and for the fragility and expenses that come with old age.
During the split, you must consider the implications taxes might have on those savings and investments. For example, if you have a traditional IRA, you will pay taxes on the money you withdraw; a 401(k) may be subject to an early withdrawal penalty; however, a Roth IRA isn’t subject to taxation.
For alimony, if you are the spouse paying spousal support, you may be able to deduct the payments on your taxes. On the other hand, if you are the receiving spouse, you will have to pay taxes on the money you receive.
Reviewing estate plans and insurance policies
Divorce interferes with the estate plan and insurance policies, regardless of when it happens. If you had your spouse mentioned as a beneficiary, you could decide whether to keep or remove them depending on your relationship. You will also want to update your estate documents on assets that were split or the ones you received.
Besides the financial aspects of a gray divorce, you should also consider the emotional impact. It can be challenging dealing with the range of emotions that come when separating from a person you’ve built a life with for so many years. It may be helpful to find someone to talk to about your feelings.