Responding to an inquiry from an AARP Magazine writer, estate planning attorney, Gary Altman, Esq., offers some interesting food for thought on the hidden costs of divorce, as it pertains to one’s assets/estate.
“There are lots of financial issues relating to divorce – particularly in the Boomer generation,” notes Altman. “While there are generally few ‘positives’ when it comes to the financial rationale for divorce, Medicaid eligibility could incentivize people to divorce since both spouse’s assets are counted to determine if eligible. In other words, if you are no longer married, your spouse’s assets to not factor into your eligibility equation.”
“However,” Altman points out, in addition to the legal costs of divorce alone, “divorcing could also mean losing all sorts of rights, like the marital deduction for estate taxes, possible pension benefits, and possible health benefits. It’s also much easier to curb hefty estate taxes when planning for marital couples than singles. Another hidden cost is the need to redo all estate documents and change all beneficiaries, assets, etc.”
Of course, these and many other considerations also come into play when getting married or remarried. As with all major life changes, it’s important to talk to your financial and estate planning advisors to ensure that you fully understand what impact it can/will have on your financial well-being.