Thinking about retiring soon? If so, you’ll want to take the necessary steps now to protect your assets and avoid potential pitfalls in the future. Planning for retirement includes thinking about things like establishing a will, estate plans, and trust documents.
However, it also means thinking about more personal matters like divorce. Unfortunately, getting divorced doesn’t become any easier just because you’re planning on retiring within the next few years. In fact, divorce can be even more complicated as a result of age-related factors such as estate planning and healthcare concerns.
The good news is that you don’t have to go it alone if you’re concerned about how a divorce might impact your retirement plans. Here are some helpful tips regarding what retirees need to know about divorce laws so that their golden years stay golden.
Deciding On A Cohabitation Agreement Or Marriage Agreement
Before diving into the details of divorce laws, you and your partner may want to discuss the option of cohabitation agreements or marriage agreements. Cohabitation agreements are contracts between partners who are not married but live together.
Marriage agreements are contracts between two partners who are married but who want to document additional terms and conditions that may not be in a prenup. These documents can help protect your assets in the event of a divorce. If your divorce is uncontested, a judge may not even review these agreements.
However, if your divorce is contested, these agreements can be extremely helpful in resolving divorce-related issues quickly. Unfortunately, because of their nature, these types of agreements often aren’t legally binding, which is why divorce laws are an important part of planning for retirement.
Establishing An Estate Plan
A big part of your retirement planning should be developing an estate plan. An estate plan includes documents such as a will, trusts, and other estate-related documents. With an estate plan, you’ll be able to ensure that your assets go where you want them to go and that your loved ones’ financial needs are met.
For example, you can leave a percentage of your estate to charity, while providing a larger sum to your spouse. When you have an estate plan, your assets will be distributed according to your wishes, rather than through the courts.
As such, your divorce proceedings won’t impact your estate plan. There are two things you should know about divorce laws and estate planning:
- Your spouse may have rights to your assets. A spouse may be entitled to a portion of your estate, even if you have a will.
- You may want to add a survivorship clause. Survivorship clauses ensure that assets go to your spouse if you pass away.
Healthcare Power Of Attorney
As retirement plans progress, it’s important to have a healthcare power of attorney. A healthcare power of attorney is a document that allows you to appoint someone to make medical decisions for you if you’re unable to do so. Without a healthcare power of attorney, a judge will make these decisions for you.
A judge may not choose the same doctors or medical treatments that you would have chosen. When you have a healthcare power of attorney, you can have your wishes documented so that your loved ones can make decisions for you.
Healthcare powers of attorney are useful if your divorce is contested or you and your spouse don’t agree on how to handle your healthcare. You can name separate individuals to make medical decisions for each spouse.
Additionally, you can make medical decisions ahead of time by naming the same person to make medical decisions for both spouses. You can even name a different person for each spouse if you want to.
Final Agreements: Divorce, Property Settlement, And Cohabitation Agreements
As retirement draws nearer, you’ll likely want to sit down with your partner to discuss final agreements for divorce, property settlement, and cohabitation agreements. Divorce agreements are contracts between two spouses who are divorcing. Property settlement agreements are contracts between spouses who are divorcing and dividing assets.
Cohabitation agreements are contracts between partners who are not married. These documents can help protect your assets in the event of a divorce. If your divorce is uncontested, a judge may not even review these agreements.
However, if your divorce is contested, these agreements can be extremely helpful in resolving divorce-related issues quickly. Unfortunately, because of their nature, these types of agreements often aren’t legally binding, which is why divorce laws are an important part of planning for retirement.
Protecting Your Assets In Divorce
Unfortunately, there are no guarantees that divorce won’t impact your retirement plans. However, there are some things you can do to protect your assets in the event of a divorce. The first thing you can do is keep your finances separate.
This will make it more difficult for your spouse to “take” from you. You can also make sure that your assets are properly documented and protected. This includes having proper estate planning documents in place. You may also want to consider purchasing a life insurance policy.
A life insurance policy can help protect your spouse if you pass away, which can make it easier to protect your assets. You can also consider putting your assets in a trust. This will make it more difficult for your spouse to access your assets.
Remember, divorce laws will likely change a lot during retirement. As such, it’s important to keep an eye on changing divorce laws. This way, you can take the necessary steps to protect your assets and avoid potential pitfalls in the future.
How Divorce Laws Can Change During Retirement Years
While the majority of divorce laws remain the same throughout the retirement process, there are some important considerations to keep in mind.
For instance, you may want to consider waiting until you reach retirement age to officially file for divorce. Why? Because retirement allows you to access your retirement funds without penalty.
This assistance could prove very helpful in making ends meet until your divorce is finalized. Additionally, you may have a decreased income during retirement years, which may make it more difficult to pay alimony.
Conclusion
Retirement is a time when you should be enjoying your golden years and enjoying life. Unfortunately, divorce can make this difficult.
However, there are a number of things you can do to protect your assets and make your retirement plans more successful. With the help of a trusted lawyer, you can establish an estate plan, have proper documentation, and protect your assets in the event of a divorce.
