With more women entering the workplace and social stigmas regarding divorce evolving, older couples are choosing to end their marriages rather than stay in unhealthy relationships. If you are thinking of filing for divorce and you are past the age of 50, there are some unique concerns to take into consideration.
Here are three mistakes to avoid making when you file for divorce after 50.
1. Failing to plan ahead for tax changes.
Once you become divorced, the way you file your taxes could be affected. While tax concerns rarely cross the minds of individuals going through a divorce, it can be helpful to understand how certain elements of a divorce can affect your taxes in the future.
For example, alimony payments are considered tax deductible by the party paying them, but the taxes for these payments must be paid by the receiving party. Knowing how divorce can affect your taxes will help you better negotiate with your spouse during the divorce proceedings.
2. Failing to make arrangements for health insurance.
If you have been covered by your spouse's health insurance policy in the past, getting divorced will affect your eligibility to receive benefits. Since medical costs can increase as you age, it's important to consider your coverage options when filing for divorce after 50.
If you have the financial means to pay for the cost of your spouse's policy premiums plus a 2% service fee, you may be eligible for continuing benefits under COBRA. You may also want to consider shopping for a more affordable private health insurance policy before your divorce is finalized and your healthcare costs are no longer covered by your spouse's insurance policy.
3. Failing to understand your marital debts.
After a divorce becomes finalized, you may still be responsible for paying toward debts incurred during your marriage. In the nine states that recognize community property law, both spouses are financially responsible for repaying debts acquired during the marriage, even if the debt is solely in the name of one spouse.
States that have common law property requirements hold both spouses responsible for repaying joint accounts after a divorce. Understanding your marital debts will help you better determine your financial obligations after your divorce is complete.
Opting to end a marriage after the age of 50 can be a challenge. Be sure that you plan ahead for income tax and health insurance changes, and that you are prepared to pay for marital debts according to your state's divorce laws. For more information, talk to a place like Grenadier, Starace, Duffett & Keisler, PC.