The overall divorce rate for Americans may be falling, but the number of people over 50 who are getting a divorce is on the rise. Divorce is never easy, of course, but it seems to take a particularly heavy financial toll on the over-50 crowd, and especially on women.
This can be attributed to many reasons, including the fact that married women may have been out of the workforce or earning less money than their husbands, and the fact that women live longer than men and need their financial resources to last later in life.
That said, some women make common mistakes after divorce that can cost them dearly. Here are six of those mistakes:
1. Letting emotion determine decisions
Because of the emotional trauma, many women want divorce over as quickly as possible without taking into account long-term consequences, says U.S. News. Instead, it's important to recognize that a large part of divorce is about the money, not the emotions, and that your financial future may be at stake. Because of this, it pays to make decisions based on dollars and cents.
2. Not getting all the records
It's not uncommon for one of the parties in the divorce to try and hide financial assets. Experts advise that women should gather at least three years of tax returns, because those records will show tax schedules that otherwise might not be disclosed.
3. Not knowing what you owe
Another important record to have is a full credit report. In some states, including California and Texas, you're usually responsible for half of your spouse's debt. In other states, you may be held liable for jointly-held credit cards or loans. A full credit report ensures that there are no surprises for you or your spouse.
4. Not considering tax consequences
It's important to understand tax considerations when splitting brokerage accounts. Why? Because of the capital gains taxes on those assets. This is particularly important for women who may need to sell shares for cash-flow purposes.
5. Forgetting about health insurance
You may be in for an unpleasant surprise when you begin shopping for your own health insurance after having been covered under your spouse's, especially if you're under 65. Your options are to seek coverage through your employer, sign up for your state's health care exchange or continue your existing coverage through COBRA for up to 36 months.
6. Not educating yourself
One of the best ways to ease your uncertainty over divorce is to educate yourself about the process. Consider consulting a local attorney skilled in divorce issues. He or she can provide the detailed legal guidance you deserve.