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Lessening the impact of a complex later-in-life divorce

| Apr 21, 2020 | Uncategorized |

If you are in your middle years and facing a complex divorce, the thought of a lengthy, stressful court battle is no doubt highly unappealing.

Mediation is a private, less expensive alternative to litigation. This option can lessen the impact of a high-net-worth divorce, which is why it is popular among couples who are parting ways later in life.

Understanding your finances

Perhaps your spouse has been taking care of your marital finances. There is no time like an impending divorce to take stock of your current financial picture. That picture is about to change. Therefore, you must understand how finances figure into your life now to better understand what kind of financial future you can expect. You must learn to budget, and you will likely have to downsize your lifestyle expectations.

Tying in tax consequences

When you divorce later in life, time is more precious. You no longer have the luxury of going for your Ph.D. or starting a whole new business as you might have done when you were younger.

When you are thinking about your future and the amount of income you will need, do not forget about the tax consequences. For example, if you and your spouse split brokerage account proceeds, capital gains will apply.

If you are to receive spousal support, remember to determine how much you will receive after taxes before you agree to a monthly sum.

Working out your agreement

Prepare for mediation by bringing in a list of assets and liabilities so you and your soon-to-be-ex can begin working on property division. Neither of you will come away with everything you want, but cooperation and compromise are focal points in this form of alternative dispute resolution.

In a high-net-worth divorce, you should expect to have a secure financial future, but even so, you will have to make some adjustments. Your mediator will guide you and your spouse and help you over the rough spots. Mediation provides a more conducive atmosphere than litigation for reaching an agreement, thereby lessening the impact of a complex divorce.