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Woman and finance

What every woman over age 50 going through divorce needs to know to take control of her financial future

By Kelly Pedersen, CFP®, CDFA

As a Certified Divorce Financial Analyst (CDFA), I’ve seen it many times. A woman walks into my office after 20, 30, even 40 years of marriage, but now that marriage over.

After decades of building a life together – and leaning on her spouse to manage the finances – she finds herself on the precipice of a divorce. Regardless of who instigated the split, it’s an unnerving and unsettling experience. What does life look like next year? In 10 years? Can I live the life I want for myself and my family? The fear of the unknown can be paralyzing.

It even has a catchy name: “grey divorce.” The reality is the divorce rate for people over age 50 has doubled since 1990.

For many women who find themselves in a “grey divorce,” their spouses are often the ones who managed their finances, often for decades, which leaves those women in a particularly precarious situation when the marriage ends. In fact, the LA Times reports that divorced women over age 50 experience a 45 percent drop in their standard of living.

What women going through a divorce need to know is: this doesn’t have to happen to you.

Put together your net worth statement

My first piece of advice is: know what you have and what you are worth. And I mean everything. Work with your advisor to draft a net worth statement that calls out every asset you have. Real estate. Cars. Vacation homes. Bank accounts. Investment accounts and 401k plans. Valuable jewelry, art and other collectibles. Everything.

At CAISSA, we analyze all the underlying assets to determine what post-divorce life can look like. We also advise our clients to develop this net worth statement quickly, as it’s far from unheard of for the other spouse to spend down those assets. So speed of documentation is very important.

Also, make sure you have access to all financial accounts. Print every statement every month until the divorce is final to ensure you have a detailed and accurate accounting of assets and spending.

Start recreating your financial identity

Just as a divorce can mean recreating (or rediscovering) a woman’s personal identity, it’s also a time to redefine and reclaim your financial identity. That means taking control of all aspects of your finances, such as updating your estate plan, changing beneficiaries and making sure titles on accounts are correct.

Also, revoke (not just amend) all prior wills and trusts and create new ones. Start from scratch to ensure these critical documents accurately reflect your wishes.

Next, change your home owner’s insurance policy so that your insurance company knows who actually owns your home after the divorce. You want to make sure you are clearly identified as the policy holder / homeowner in case something catastrophic happens.

Don’t let the emotion of the situation cost you

Needless to say, divorce can be emotionally exhausting. Unfortunately, we have seen some of our clients’ spouses try to take advantage of the situation by attempting to divide assets in a way that is not equal. It can be confusing to know what everything is worth, and what a fair division of assets looks like. Just remember this: cash is king, and when in doubt, split it. Not all investments or accounts are equal in “value,” even if they appear to have a similar statement “balance.” You want as much cash as possible after a divorce. We work with our clients to make sure the division of assets is fair and equitable so they can maintain the standard of living they desire.

And don’t wait until the divorce is final, or close to final, before seeking the advice of a qualified financial advisor. The sooner you do so, the better. Everything may look fair on paper, but often it is not.

At CAISSA, our goal is to reduce the anxiety that comes with divorce and reassure our clients that they can do this. We’ve done it many times. We work closely with our clients to help them understand what their income and tax liability will be in the first few years after divorce. No one want to be caught flat footed and owe a lot of money. Ultimately, our job is to paint the picture of all of the financial options available and what life can look like post-divorce. That can bring tremendous peace of mind.


Learn more about how you can own your financial future after a divorce.