Baby boomers in Alabama and other states in America are getting divorced at increasing rates. Getting a divorce can be financially detrimental no matter how old a person is, but is especially a concern for those who are near retirement and are concerned about asset protection. A few tips may help a person who is considering divorce in our state to protect his or her financial future.
First, it would be wise for a divorced individual to change his or her beneficiaries on life insurance policies or retirement accounts to people other than the ex-spouse. Forgetting to do this means that a large sum of money may end up going to one’s ex against one’s true wishes. Even if another person is listed in a will, a beneficiary designation trumps the will.
In addition, if a divorced individual is considering getting married again, it’s wise to talk about the new couple’s financial goals. This is important because the two individuals may have individual assets that they want to go to their separate children. In addition, if one person has extensive debt, the other party would benefit from knowing this information. It may also help to look at one another’s credit report before getting hitched; after all, finances are one of the biggest reasons for divorces.
A prenuptial agreement can provide asset protection, as the agreement clarifies which assets one gets to keep in the event of divorce. In the absence of such an agreement, two divorcing individuals can still try to reach a mutually beneficial settlement through negotiation. However, a judge will have to determine the best resolution for the couple if the two can’t work out asset and property division matters on their own in Alabama.
Source: USA Today, “Remarrying in retirement? Look before you leap”, Rodney Brooks, May 20, 2014