AARP Hearing Center

If Adam and Eve had decided to split up after decades of acrimony over the apple, dividing their meager property wouldn’t take Solomonic wisdom.
But given the tangle of income and assets that older couples typically have today, ending a marriage later in life can have a financial impact of biblical proportions. One study found that wives who divorce after age 50 see a 45 percent decline on average in their standard of living; husbands see a 21 percent drop.
Avoid a plague of problems by heeding these 10 commandments.
1. Thou shalt not covet a bygone lifestyle.
When going through the upheaval of divorce, you may want to keep other aspects of your life the same. But that’s unrealistic because you’ll likely have only half the financial resources.
“You might have to downsize, maybe cut back on your lifestyle,” says Chris Chen, a certified divorce financial analyst in Newton, Massachusetts. “But in most cases you can, in fact, plan so you will not run out of money in your lifetime.”
2. Thou shalt not worship thy home.
In many divorces, one spouse prefers to stay in the family home and will give up some retirement assets to buy out the ex. That’s usually a mistake, advisers say, given how expensive a house is to maintain. Plus, it’s a highly illiquid asset that can leave you cash-poor.
“If a home is going to be more than 70 percent of your net worth, you should consider whether you can really afford it,” says Nancy Hetrick, a certified divorce financial analyst in Phoenix.
3. Thou shalt heed thy state’s rules of division.
Where you live largely determines how assets you and your spouse acquired during your marriage will be split. Assets you owned before you wed — and possibly gifts or inheritances you received while married — are considered separate property and won’t be part of the settlement.
In the country’s nine community property states, marital assets are divided evenly. Everywhere else, state guidelines call for an “equitable distribution.”
“Equitable doesn’t necessarily mean 50/50 and doesn’t always feel fair to the parties involved,” says Julianne Incardona, a certified divorce financial analyst in Williamsville, New York.
You can negotiate dividing specific assets as long as the overall value of the distribution meets state guidelines or you agree to a different split.
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