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Getting a divorce when retirement is near

On Behalf of | Jun 5, 2020 | Firm News |

Older adults in Texas who are getting a divorce may have spent years planning a retirement together that will no longer happen, or they may already be retired. They will need to rethink what these years will be like, and it is important for them to take steps that will ensure financial stability.

People will need a list of all their assets and debts. If they have items such as antiques, jewelry and art, these will need to be appraised. They should note what property is shared and what is individual property. If there are retirement accounts to be divided, it is important to understand the rules for doing this, which will vary depending on whether the account is an IRA, an annuity, a 401(k) or a pension plan. This information can help them begin thinking about what the divorce settlement will look like.

After the divorce, some people will need to focus on putting away six to 12 months of savings in an emergency fund. Others may want to spend some time traveling or working to improve their community. Some people may want to make sure they have enough money to help their children or grandchildren with education or other expenses. These should all factor into what people ask for when they negotiate the division of property.

Since Texas is a community property state, all marital assets are supposed to be divided equally. However, the individuals do not necessarily have to split every asset 50/50. Instead, they might come to an agreement in which one person keeps certain assets and the other keeps assets of a similar value. Reaching an agreement through out-of-court negotiation with the assistance of attorneys can be less expensive and time-consuming than litigation and leaves the specifics of the divorce agreement wholly in the hands of the couple divorcing.