It is a well-known fact that the end of a marriage can have financial repercussions for both spouses, both immediately and moving forward. This is even more true for Connecticut residents going through grey divorces, or divorce after age 50. Thankfully, there are a number of ways to mitigate any financial concerns the divorce might bring up.
Depending on how assets and debts are divided during the divorce process, it may be possible to tap into some of those assets for additional income. For example, a spouse who is granted the house in a settlement may be able to tap into the home's equity for extra support. This process is called a reverse mortgage.
In essence, it is possible to access the equity of the home by receiving payments based on its real estate value. This is done by way of a "reverse mortgage." For individuals 55 and older, up to 50 percent of the home's equity can be converted to tax-free cash. Of course, depending on the arrangement of the divorce, doing this before finalization could complicate the asset division process.
Divorce can be a complicated process, especially when it comes to finances. It is important for Connecticut residents approaching divorce to fully understand their rights and responsibilities under state law when it comes to the division of assets and debts. Seeking out the support of financial and legal advisers during this time can go a long way toward clearing up the confusion and setting both spouses on paths to happier, more financially stable futures.
Source: castanet.com, "Divorce in retirement", Laurie Baird, April 25, 2016