Australians are divorcing later in life more than ever before, with many struggling to get back on their feet financially after a split.
Apart from coming to terms with the emotional pain, one of the biggest problems for older people after a divorce is figuring out how to rebuild their finances.
With the bulk of working years behind them and limited assets after the high expense child rearing years, it can be difficult to recover their married standard of living.
We have a number of friends in this situation, so here are my observations on how to handle marital problems when you’re over 50. And where to turn if things are really going pear shaped.
Why does divorcing later in life happen?
Your 50s is a decade of massive change… kids leave the nest, work slows down and the body gently reminds you to take things a bit easier.
After the distractions of raising kids stops, some empty-nesters realise that their relationship has been left behind.
However, it’s in your financial and emotional interest to try to work things out first.
Lorraine Murphy, Director of Clinical Services at Relationships Australia, says that it’s important for both partners to come together to focus on making things work.
Perhaps there hasn’t been a serious indiscretion to cause the relationship to fail. You’ve simply grown apart. In this case, counselling, being more open with each other or just spending more time together are options to prevent divorcing later in life.
There’s a good chance you’ve spent some of the best years (or decades) of your life with each other. So why not give it another shot?
Getting a divorce
If things have gone seriously down hill and the relationship can’t be salvaged, then be smart about how you handle the settlement.
Women have to be especially careful.
The average Australian woman will live five years longer than a man, but has a superannuation balance that’s 43 per cent lower. So dividing the family assets fairly in a split is important to maintaining quality of life.
WATCH: The financial consequences of a relationship breakup can be devastating if you’re not prepared.
Plus, some women may not have a complete picture of the family finances. Particularly if they’ve left the workforce to focus on raising children. Make sure you are fully informed about every aspect of your finances. This includes bank accounts, investments, insurances etc. Know exactly where all the important documents are kept.
When the decision to split is made, protect your access to joint bank accounts, cancel joint credit cards and set up your own, change passwords and generally be on guard about any funds which may “walk”.
Splitting your assets
One of the most important considerations will be what to do with the family home and any investment properties. While it may seem like a great idea for one partner to keep the house, there are considerations. Ongoing maintenance fees and tying up money in an illiquid asset are two.
For couples who are asset rich but cash poor, a good option can be to sell the house and split the proceeds.
Lastly, while your split may be amicable, it’s always wise to secure copies of all financial documentation. Then make sure you engage the services of a lawyer to organise the settlement.
Murphy also recommends visiting your local Family Relationship Centre for information and confidential assistance. Otherwise, in the event things do get ugly, the Family Court may have to resolve the situation.
Once the divorce has been finalised and you’re out on your own, it’s more important than ever to be smart about finances.
With one income and set of assets, you’ll need to put together a plan. What steps will you take to maintain or achieve your desired quality of life?
It’s a good idea to seek financial advice to ensure you’re on the right track.
And finally, don’t forget about estate planning: update your will to reflect your new situation.