Author: Matt

Many married couples have at least one joint credit card. While this financial tool can benefit you in many ways, it can also result in complications should you decide to divorce.

There is no right or wrong way to manage joint credit card debt in a divorce, but there are several options to consider.

• Pay off the debt before you divorce: If you and your spouse are on speaking terms, talk to them about using money on hand to pay off all your joint credit card debt. Yes, it’s a hit to what you’ve saved, but it’s also one less thing you have to worry about in your divorce.
• Split the debt: In many cases, it’s best to split the debt down the middle. The easiest way of doing so is a balance transfer credit card. This leaves both individuals with the same amount of debt, without the other’s name on the account.
• Make sure it’s yours: Before you do anything, make sure the debt is actually tied to you. For example, if your spouse brought a large credit card balance into your marriage, and your name isn’t on the account, you may not be responsible for the debt.

When it comes to matters of debt division, you can expect some resistance during the divorce process.

Joint credit card debt is common, so make sure you have an idea of how to best manage it before, during and after your divorce.

By taking the right approach, you reduce the risk of joint credit card debt bogging down the divorce process and your future budget.

Older generations often describe younger people as impulsive, self-interested and less likely to commit to a long-term relationship. Even if that is true, recent data shows a rise in divorce rates among those older than age 50. People in that demographic may have a multitude of understandable reasons to end their marriage, but there is a key difference.

If you are over the age of 50 and thinking of divorcing here in Texas, you may want to consider just what the impact will be to your finances. Older people generally have been married for a longer period of time and thus have more assets to divide in a divorce agreement. Experts say that there are certain factors you’ll want to keep in mind as you go through the process of divorce. This way, you’ll be better prepared for potential financial impacts.

Plan for lifetime expenses

When an older person gets a divorce, it doesn’t mean he or she doesn’t have plenty of life left to live. One recent statistic found that people aged 65 could expect to live almost 20 additional years. They need to think of what kind of expenses they may need for the rest of their life. If they happen to divorce, they will likely divide their assets between themselves and their ex-spouse. That leaves the person with less money for not just living expenses but potential medical costs.

Medical and day-to-day finances aren’t the only consideration. Certain tax laws may greatly affect each person’s future finances. Some people may pay their ex directly from a retirement account, but both a 401(k) and IRA payout may incur taxes and penalties. It is a better idea to get a qualified domestic relations order for your 401(k) and to list an IRA trustee-to-trustee payment explicitly in your divorce decree.

What if you get married again?

It isn’t uncommon for people this age to remarry. However, if they do so and subsequently divorce again, that could mean an even more significant impact on the person’s finances. Even if that marriage continues for the rest of the person’s life, his or her assets may end up with the other spouse’s children from a different relationship other than their own. The best way to avoid all of that is to get a prenuptial agreement that outlines exactly how to handle finances in the event of divorce or death. 

No matter what the future may hold for you, divorce doesn’t have to destroy your finances. Working with a divorce and family law attorney can give you the confidence to work through your divorce proceedings and feel good about the future. It is yours to make, no matter your age.

Divorce can happen to anyone for any reason. Various studies say that the overall rate of divorce is on the decline. Some say this may be due to fewer people getting married, but overall, fewer couples are choosing to legally dissolve their marriages. 

However, the rate of divorce among older people, according to many of these same studies, is rising. Data from the Pew Research Center found that the divorce rate for people age 50 and older doubled in the last 30 years. Many Texas residents may struggle after their marriage ends while they try to adjust to a new set of personal finances. The struggle often comes to a head when considering their retirement savings. Fortunately, if this applies to you, experts say there are ways to minimize the impact of divorce on your retirement.

Change your day-to-day finances

If you haven’t been working, you may want to get a job. Consider your skill set, and know that you may have to start somewhere that isn’t your dream job. If you’ve been working, definitely stay at your job if you can, since it’s often the best means for getting health care. Even though COBRA is an option, it may not be the most cost-effective one.

Another point to consider when thinking about your immediate need for money is your budget. If you don’t typically do your own budget, you’ll want to start. Even if you have been the one handling all the family finances, you may need to make adjustments to your spending or income. This is also how you can build a savings account if you don’t have one and start your retirement fund. Experts recommend investing in low-risk funds, especially if you don’t have a lot of years before you’re going to retire.

Take stock of your potential income and assets

If you can, try to wait as long as possible to collect Social Security. That way, you will receive the maximum amount of benefits possible. If your spouse worked and you didn’t, as long as you were married for at least 10 years, you qualify for Social Security benefits through him or her.

If you and your spouse shared a home, though it may be tempting to keep it, selling it may be the better financial choice. Many people think they can wait until retirement and sell the home, but not many people actually do that. If you’re going to keep it, you’ll need to make sure to maintain it, which is more costly on one income.

Start your own retirement account

If you don’t already have your own retirement savings, now is the time to start. Creating an account may be vital before finalizing your divorce because, if you receive any retirement assets as part of the divorce agreement, you’ll need somewhere to put them. An IRA is likely the best bet as long as you leave the assets in place until about age 60.

The most important thing you can do is consult professionals to help you navigate this transition. A financial planner can look at multiple aspects of your personal finances and recommend how to proceed. An attorney who has extensive experience in helping people through the divorce process can serve as your advocate, making sure that your best interests are kept top of mind.