Getting a divorce is rarely easy. It can be emotional, stressful, and complex. The decisions you make during this process will affect your financial future, family relationships, and long-term plans. For younger couples, child custody and support may be the biggest concerns. For older couples, the focus often shifts to homes, retirement accounts, trusts, inherited assets, and estate planning.
Here’s what you need to know if you are ending a long-term marriage.
Dividing Assets
Dividing marital property is one of the most challenging parts of divorce — especially when a couple has spent decades building wealth together. Older couples may have commingled family heirlooms, inherited property, and joint investments, making it difficult to separate who gets what.
Be sure to review:
-
Retirement accounts and pensions – Divorce may require splitting these assets under a Qualified Domestic Relations Order (QDRO).
-
Life insurance policies and annuities – Removing a spouse as beneficiary may have tax or financial consequences.
-
Jointly owned property – Family homes, vacation properties, or rental real estate may require special planning to avoid disputes and minimize taxes.
💡 Pro Tip: Speak with a knowledgeable estate planning attorney or financial professional before changing beneficiary designations or transferring ownership of property. Doing so too soon could trigger tax issues or affect eligibility for future benefits.
Tax Implications
After divorce, each spouse files taxes individually rather than jointly. This change can impact tax brackets, deductions, and estate planning strategies.
The family home is often the most valuable shared asset. For couples who have owned their home for many years, the value may have appreciated significantly. Transferring ownership to one spouse can reduce that spouse’s capital gains exclusion when the home is sold, potentially resulting in a higher tax bill.
Long-Term Care and Medicaid Planning
Divorce can also affect long-term care planning. Couples who have been working to protect assets by placing them in trusts or preparing for Medicaid eligibility need to review these plans. Asset division may impact:
-
Medicaid qualification
-
Timing of look-back periods
-
Responsibility for future care costs
Consult an elder law attorney before finalizing a divorce settlement to ensure your plan still meets your long-term care goals.
Estate Planning Updates
Many states automatically revoke provisions in a will that leave assets to a former spouse once the divorce is final. The same applies to powers of attorney and advance health care directives.
You should update your:
-
Will or trust – Confirm who inherits your assets.
-
Powers of attorney – Name new agents to handle finances and health care decisions if needed.
-
Beneficiary designations – Review retirement accounts, life insurance, and payable-on-death accounts to ensure they reflect your wishes.
In some cases, divorcing spouses may still want to name each other as agents or beneficiaries. If so, you must re-sign documents after the divorce, as old ones may have been automatically nullified.
Final Thoughts
Divorce has lasting effects on your finances and estate plan. If you have accumulated significant assets or completed joint estate planning, it’s wise to work with an experienced estate planning attorney during and after the divorce process.
📞 Call our office at (207) 848-5600 to review your estate plan and ensure your wishes are properly updated.
