Divorce is an extremely hard time for most in all areas of life, but finances, taxes, and your retirement can all take a crippling hit, according to the Overland Park tax preparation experts at Pro 31 (located in Louisburg). Even when people think they should be entitled to things automatically, they are often sorely mistaken.
According to Kiplinger, a new phenomenon is something called a grey divorce. This applies to when a couple that is over the age of 50 chooses to file for divorce. It’s often more amicable because kids and custody are less likely to be involved, and many think there is an understanding of what belongs to them over a lifetime of work, savings, and retirement savings. But many people do not realize it’s not as cut and dry as it seems, and it’s important to seek a professional Overland Park CPA to help guide you through a grey divorce.
Here are a few things to consider if you are going through a divorce while nearing your retirement years.
- Understand pensions are often split in a divorce. Most people think that because you earned it at your job, that you can keep this money to yourself after a divorce; however, this is a myth. If you ask an Overland Park tax preparation expert about this, they will inform you that your ex-spouse is entitled to half of your earnings if your ex-spouse so chooses.
- Know that just because you think something belongs to you, it might not hold up in court. If it was acquired anytime throughout the marriage, your ex-spouse might be entitled to a percentage, if not half of it. This is shocking to some, as some individuals might have contributed or inherited money that belonged to only them. However, in a divorce scenario, their ex is entitled to half.
- Keep your beneficiaries up to date with your companies. Things such as life insurance, estate planning, or other assets should all be up to date with a new beneficiary. CPAs in Overland Park recommend designating some you trust, such as another close family member, children, or a longtime loyal friend.
- Overland Park Accounting firms like Pro 31 suggest putting all your assets into a trust. This protects all parties so that if you both remarry, all your acquired assets only go to the children you designate. Designated children are often the children of a divorced couple in which each parent shares custody. So, for example, if two ex-spouses remarry, their assets could go to stepchildren or unrelated parties if there is not a documented trust.
A quick reminder: Always consult an Overland Park tax preparation expert when filing for taxes after a divorce. Taxes can be a little more difficult the year of a divorce and having an expert can be a huge help. Our tax professionals at Pro 31 in Louisburg can help you navigate these waters and potentially save hundreds if not thousands of dollars. Give us a call at our Louisburg office today at (913) 837-3131 or visit our website to fill out a form and receive a quote on our wide range of services, including individual finance and tax return preparation in Overland Park as well as small business accounting. We are located just 20 minutes south of Overland Park in Louisburg and would be glad to help with all of your financial questions.