Divorce is a challenging experience for most people, both in terms of emotions and finances. Especially for older Americans, who now account for a quarter of all divorces, there is plenty of anxiety surrounding the prospect of getting divorced just as they are also preparing for retirement. As Bloomberg reports, one issue that can further complicate divorce is the fact that in a majority of marriages just one spouse controls the major financial and investment decisions. That can leave the other spouse at an extreme disadvantage when it comes to negotiating a fair divorce settlement.
Who controls the finances?
A recent survey by UBS Global Wealth Management found that 56 percent of married women still leave the major decisions surrounding the couple's wealth and investments to their husbands. Whereas close to 80 percent of husbands in the survey said they were confident making long-term financial decisions, just 55 percent of wives said the same.
Somewhat surprisingly, this gender gap concerning financial decisions was more pronounced among younger couples than older ones. Whereas 54 percent of Baby Boomer women left the major financial decisions to their husbands, that figure rose to 61 percent of Millennial women.
Risks may be greater for older couples
Despite the fact that traditional gender roles around finances are more common among Millennials, it is among older couples where that gap can cause especially serious problems. That is because when a younger couple divorces, each spouse usually has plenty of time to get their financial affairs in order and to look for a new job. For older couples on the other hand who are preparing for retirement, getting any unwanted surprises about the state of the couple's finances can be devastating.
According to the Washington Post, about a third of couples disagree about their retirement plans. Those disagreements could eventually lead to divorce. They could also be indicative of one spouse knowing more about the couple's finances than the other. While one spouse may have ambitious plans for their retirement, the other spouse may realize that the couple's finances will require them to lead a much more modest retirement.
Even worse, during a divorce the spouse who has not been responsible for the couple's financial decisions will be at an extreme disadvantage. This knowledge gap concerning finances makes it harder to negotiate a fair settlement and, in some cases, can make it much easier for the spouse who does control the couple's finances to hide assets from the other spouse.
Talking to an attorney
One way to level the playing field in divorce negotiations is to have an attorney on one's side. An attorney can help ensure that everything about a couple's finances is brought to light and can help clients negotiate a settlement that is in their best long-term interests.