Divorcing With Substantial Retirement Assets? How Can You Protect Yourself?

The rates of "gray divorce" are rising significantly -- more than 12 percent of all divorces now involve couples over the age of 50. By this time in life, you've generally accumulated a substantial retirement nest egg and may have a fully paid-off home. If you're responsible for the accumulation of most of these assets, whether through high earnings or careful saving and investing, you may be concerned about maintaining your current standard of living after you've split from one household to two. You're probably also focused on keeping your path to retirement clear of hurdles. What should you do to protect yourself during a divorce once you've accumulated significant retirement assets? Read on to learn more about what you may be able to expect, as well as a few ways you can come away from the table with at least what you brought to it.

How will your marital assets be divided?

While one advantage of "gray divorce" is that it rarely involves messy custody or child support battles, the division of assets and potential setting back of projected retirement dates can also be tense. Each state has its own laws governing the division of marital assets and award of child support or alimony -- however, each of these laws comes from the idea that the division of assets and debts in a divorce should be equitable, if not quite equal.

In community property states, this can often mean that each person walks away with 50 percent of all marital assets and debts, less what they brought into the marriage or what was exempted under the terms of a prenuptial agreement. In non-community property states, assets may be divided in proportion to what each party contributed through time and effort. In some cases, this will mean that if you were the higher earner, you'll walk away with most of the pool of assets. In others, your spouse's sacrifice of his or her career in order to be a stay-at-home parent could result in a nearly equal division of retirement assets so that your ex-spouse isn't disadvantaged by years of not contributing to his or her own retirement accounts.

What specific actions should you take to preserve your fair share of marital assets?

As soon as you file for divorce, you should contact the three major credit bureaus to freeze your credit. This action prevents anyone (including yourself) from taking out credit in your name. These freezes can be easily reversed, but in the meantime will prevent your ex-spouse from running up debt that you'll be responsible for paying during the divorce.

The award of marital assets can be negotiated with your ex-spouse and his or her attorney before your case ever goes before a judge. Often, seeking pre-hearing mediation or another type of alternative dispute resolution can help you come to an agreement that may be better and easier to implement than one a judge would award.

If you earn substantially more than your ex-spouse and your state's laws permit alimony or spousal support, you may be concerned that you'll be required to fork over a significant percentage of your monthly income until your ex-spouse has taken the opportunity to gain or update job skills and become self-supporting. However, this can often be better than the alternative. If you're able to retain most of your retirement assets in exchange for a generous alimony payment, these assets will continue to grow during your working life. Alternatively, losing most of your retirement assets and avoiding alimony can provide you with more present cash to invest, but also gives you a much shorter investment time frame.

For more information and tips, you should contact a local attorney or visit http://www.millsnv.com