Recommendations for Divorce Planning

When getting a divorce at this stage in life, there are many options to consider. Individuals at this age usually have very intertwined finances and it is a long and grueling process to divide those assets. There are many other options for these individuals to consider instead of a traditional divorce that would save people the time and hassle of dividing said assets and changing their entire lifestyle.

Because Anne has not been in the workforce for a long time and because she has been accustomed to a moderately comfortable lifestyle for such a long time; I would suggest other separation options first like a trial separation or a written separation agreement where they can remain amicable and continue life with combined assets.

One area of finance that individuals do not often consider when planning a divorce, is estate planning. Individuals who are in the later ages of life hopefully have had estate planning taken care of for several years. Therefore, when these individuals choose to divorce, they must divide their estate assets and then choose how they will distribute them in the event of their deaths. “If you’re exploring options and gathering information before you file for divorce, evaluating your estate plan should be part of that process.” (Green, 2016)

If Anne and her husband do decide to continue with a traditional divorce; I would focus their financial priorities on dividing their assets and transitioning into individual estate plans. The following suggestions are for Anne specifically because she came to me for financial advice herself, and her husband is the one who initiated the divorce. Anne should pursue a comfortable amount of alimony because the couple decided that Anne would give up her career to raise the children and at this point in her life it would be difficult to re-enter the workforce.

Anne also needs to secure the proper amount of child support for each child. If the children still reside in the house that she cares for them in, she needs to pursue possession of the home.

The fact that she already has an IRA worth $150,000 is amicable but she also needs to pursue a portion of her husband’s retirement assets because she supported him during his career by raising their children and because he initiated the divorce; she has been blindsided by the threat of not having the proper financial provisions for her retirement. In my opinion, she would have a good case for all of these financial items. I would highly recommend intense financial planning directly after the divorce is finalized in order to properly utilize the assets she is able to obtain in the planning of her future as a divorcee.

References:

MLA (Modern Language Assoc.)

Green, Janice. Divorce After 50: Your Guide to the Unique Legal and Financial Challenges. Vol. Third edition, NOLO, 2016.

APA (American Psychological Assoc.)

Green, J. (2016). Divorce After 50: Your Guide to the Unique Legal and Financial Challenges (Vol. Third edition). Berkeley, CA: NOLO.

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With a divorce rate of 49% in the U.S., financial planners are called upon to offer advice on financial concerns related to divorce.

Recommendations for Divorce Planning

In this scenario, Anne Smith comes to you for financial advice on how to ensure support for herself and the kids before and after the divorce. She has hired an attorney but they have just gotten started. She is a woman 55 years of age who has just learned her husband of 30 years wants a divorce. When the couple decided to have children, she and her spouse decided that she would give up her marketing career and stay at home with the children. The husband is an executive in a company making a comfortable salary of $100,000 a year and has decided he wants a divorce. The couple has a moderate portfolio of investments of $50,000, a home with a current value of $250,000. The husband has a retirement 401(k) portfolio of $400,000 and the wife has an IRA of $150,000. Research a scholarly (peer-reviewed) journal article pertaining to divorce planning from the Columbia College Library: (http://library.ccis.edu/home).

In 4-5 short paragraphs, provide recommendations for divorce planning and explain how the article supports your recommendations.