I’ve been separated for more than 10 years after a 30-plus-year marriage. The past 10 years, I’ve supported the family home, paid off all outstanding bills and paid off the credit card debt of over $15,000.
I also sold the family home last year and split the proceeds equally. Before selling the home, I couldn’t afford an attorney for a divorce. (I made half of what I make now, and holding on to the house took most of my money.) I filed on my own behalf, but it never went anywhere because they need documentation from both parties which (on his part) never happened.
I now have money to hire an attorney, but I am nervous about my savings and retirement accounts and money from the sale of the family home. I still work and now make over $80,000. But the problem is he has no job and is living off the sale of the home. He is 62 and could file for retirement but wants to wait a while longer.
A few years ago, I was advised by an attorney that a judge could require me to pay alimony because it was a long-term marriage and I’m the only one with income.
I am looking into investing the money from the sale of the house. Hopefully, that should not be an issue because I split those funds. However, I’m worried about my retirement accounts that have grown substantially these past 10 years. Also, for the past seven years I’ve contributed $50 a month for my five grandchildren in a 529 plan.
I really want the divorce because I know it will make me feel better, but I don’t want to fall back into another struggle financially. Before I hire an attorney, do you have any advice for moving on with my life?
Meeting with an attorney isn’t the same as hiring an attorney. You’re not signing up to serve your husband with divorce papers by scheduling a meeting. You can ask the same questions you pose in your letter to someone who knows your state’s divorce laws.
Please just take the first step and book a consultation with an attorney. In the meantime, I’ll offer my non-lawyerly take on the financial issues you raise.
Your retirement funds would probably be split if you divorce. Money you saved plus the earnings before getting married would likely be yours. But money saved and earned while you were married would probably be divided.
The rules vary by state. In a nutshell, it’s typically a 50/50 split if you live in one of the nine community property states. But the other 41 states use a process called equitable distribution. Essentially, the court tries to divide assets fairly, but not necessarily equally.
Obviously, you don’t want to share the past decade’s worth of gains with your estranged husband. But that’s a reason to not delay any longer. You want this divorce. By dragging this out, you’re risking part of your future gains.
Court-ordered alimony is a possibility, but it’s not necessarily a given. Again, the laws vary by state. A judge would consider a slew of factors, including your husband’s ability to support himself. Presumably, your husband has managed on his own for 10 years without alimony. Perhaps that could bolster your case against spousal support.
As for the 529 plans for your grandchildren, your husband could go after that money if you own the plans. But you owe taxes plus a 10% penalty when 529 funds are used for non-educational purposes. For this reason, most couples choose not to split 529 plan assets when they divorce.
Obviously, divorce has humongous financial consequences. But consider the consequences of not divorcing. While you’re married, you can’t remove your husband as the beneficiary of any workplace retirement account, like a 401(k), without his consent. Your husband is still your next of kin, meaning he could make medical and financial decisions on your behalf if you’re incapacitated. If you live in a community property state, you’re jointly responsible for any debt your husband racks up while you’re still married.
You’ve had the past 10 years to worry about every possible scenario. I don’t want to downplay the seriousness of this decision. But often when we spend a long time stewing over a big decision, the outcomes we imagine are far worse than the reality.
Look at what you’ve accomplished in the last decade: You’ve doubled your income. You’ve paid off debt. You’ve been the sole breadwinner. You may have financial hurdles ahead, but I think you can overcome them.
Attorneys are expensive. So are divorces. But you’ve been stuck in limbo for 10 years. Moving on will be priceless.
Robin Hartill is a certified financial planner and a senior writer at Codetic. Send your tricky money questions to [email protected].