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What to do about finances in a divorce near retirement

With divorce on the rise for people older than 50, protecting finances with retirement nearing may be a concern. However, Washington couples can prepare for a late-life divorce in a financially responsible way.

First, they need a good handle on assets belonging to either person as well as shared property. They should make a list before visiting an attorney as well as a list of all jobs held by either spouse. Some people may have forgotten about assets such as profit sharing plans or retirement accounts, and this can help them remember. If one spouse will pay support to the other, the couple should talk about what will happen if the paying spouse becomes disabled, has a drop in income or dies. Insurance might be able to cover these possibilities, or the couple might consider having one spouse pay the other a lump sum instead of monthly payments.

If one spouse has earned significantly more than other during the marriage, the other spouse might be able to draw retirement benefits on that spouse's Social Security work record. The marriage must have lasted at least 10 years, and this will not affect that spouse's work record. Finally, after the divorce, people should be sure to remove the ex-spouse from titles and beneficiary designations.

Washington is a community property state, so most assets either person has acquired since the marriage will be considered marital property. The couple can try to negotiate an agreement for property division, and they do not necessarily have to divide every asset in half. Even if the divorce is high-conflict, the couple may be able to resolve their differences through mediation or other alternative conflict methods instead of going straight to the more adversarial atmosphere of litigation. These methods may result in a solution that suits both people more than a court decision.

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