Statistics show that older couples are now twice as likely to divorce as they were in the 1990s. Unfortunately, this may present particular financial challenges for some seniors in New Jersey. In particular, women appear to be disproportionately more likely to lack a knowledge of household finances. A “gray divorce” can lead to unpleasant post-divorce surprises, such as learning about secret debts.
A UBS Global Wealth Management study found that 56 percent of wives said they let their husbands make major decisions about finances and investments. This seems to cut across generations as 61 percent of Millennial women and 54 percent of Baby Boomer women said their husbands make these decisions. Furthermore, nearly 70 percent of men and over half of women with children younger than 21 said they would not have an issue with their daughter’s future spouse managing finances for both of them.
However, women who are widowed and divorced advise against this approach. More than half say they regret not becoming involved in long-term financial planning, and 94 percent say they would want to be transparent with a spouse. Around 80 percent of women who remarried became more involved in financial planning in their subsequent relationships.
Spouses who are contemplating divorce and are unfamiliar with finances might want to gather and review as many financial documents as possible. This might include credit reports, tax records and statements from investment accounts. A spouse could talk to an attorney about what might happen financially in a divorce. For people near retirement, it may be important to look at how any retirement savings will be divided.