Divorce in mid-life: Fresh starts, new financial challenges for women

Your investments and other property. The laws that govern how property will be divided in a divorce vary from state to state, so you'll be guided to some extent by local laws and customary practices. "That's why it makes a difference to have a lawyer who really knows local law," says Stirrat. For instance, there are nine states that are so-called community property states, in which property acquired during the marriage is generally divided 50/50. Other states tend to call for "equitable" division of joint assets, which just means that they're split in a way that's deemed to be fair, not equal. On top of that, some states are "no fault" states, in which the circumstances of the divorce play no role in the division of assets, while other states take such factors into consideration.

If your financial assets are primarily stocks, bonds and cash, divvying them up is often straightforward once you've agreed on what constitutes an "equitable" split, Stirrat says. The complications come with assets such as stock options, income-producing real estate, a vacation home, art or collectibles. There might be further complications if one of you owns a business: agreeing to a value for the business as well as how much, if any, either party might be entitled to can be difficult.

"The typical advice for all of these kinds of assets is not to retain joint ownership," says Stirrat. It's important that you get independent, outside valuations, she adds. This not only reduces the likelihood of conflict, but ensures that you'll receive fair value (or pay fair value) in the event of a buy-out.

Your house. It may be the place where you raised your children and now call home, but it's also an asset. Try to put your emotions aside if you can. As Stirrat observes, "One of the biggest mistakes my divorcing clients make is to try and keep the marital home when they can't afford it. If you decide to put your home on the market, have it appraised right away so you can agree on a price." This is doubly true if one of you is going to buy the other out — you'll need to formally agree on a fair buyout price. If the divorce is amicable, you'll likely need just one appraisal. If not, each partner might want to get separate appraisals, which could then be averaged.

Your retirement assets. It's always a good idea to include your accountant when you speak with your divorce lawyer about handling these assets. Transferring one person's retirement account, or a portion of it, to another requires special care to make sure there aren't tax implications. Also bear in mind that any private sector retirement plan that's covered by the Employee Retirement Income Security Act (ERISA), such as a 401(k) or a pension, will require a court-approved division of those assets through something called a Qualified Domestic Relations Order (QDRO). Your employer will also have to approve any QDRO.

"Getting the required language and approvals on a QDRO takes time, and it can be costly," Stirrat says. "So be sure to spell out how that cost will be divvied up ahead of time."

Social Security is another consideration. If you've been married for 10 years or more, you're entitled to 50% of your spouse's benefits or 100% of your own, whichever is greater. Says Stirrat, "If the marriage has lasted for nine-and-a-half years, it may be worth sticking things out for the additional six months." Note that claiming Social Security on your spouse's work record has no effect on his or her benefits.

Your monthly income. You may have your own income at the time of divorce — and might earn more than your spouse — but many women are in a very different position. They may have left their careers to have children, and have a lower income than their spouse because of their years out of the workforce. Working closely with your attorney and accountant, you should try to calculate how much income you'll require going forward, so you can ask for and hopefully receive the spousal support you need.

"Divorce can be an emotionally and financially difficult time," says Stirrat. "But you can come out the other side feeling stronger and less worried, with greater hope, stability, and freedom."