Older Virginians who decide to divorce often have to contend with more complicated issues than younger couples. This is because older adults frequently have more complex finances than younger people who divorce. Older adults need to be cautious with how they handle property division, spousal support and estate planning during a divorce.
People who are 50 or older when they get divorced will need to be careful about the potential tax consequences that they might face when dividing property. Since the Tax Cuts and Jobs Act was passed, new rules apply to spousal support that people should know. In the past, the spouses who paid alimony could deduct their payments on their taxes. Now, however, the spouses who pay alimony are no longer allowed to deduct their payments, and the recipients do not have to pay taxes on the money that they receive.
If the spouses have estate plans, they will need to review them and make any necessary changes. Updating the beneficiaries of retirement plans, life insurance policies and other assets can help prevent the proceeds from going to the ex-spouse after divorce. If a parent wants to ensure that their children will be protected, he or she can establish a trust to benefit the children into their 20s.
Getting divorced after age 50 can be difficult. Working with a financial analyst and a divorce attorney may help people to avoid making potentially costly mistakes. An experienced lawyer might work with the financial analyst to protect his or her client’s financial interests and to prevent harmful tax consequences from occurring. A lawyer may be able to negotiate a full settlement agreement with the client’s estranged spouse that settles all outstanding legal disputes outside of the court process.