When the phrase "property division" is said in conjunction with the word divorce, images of splitting homes and cars may come to mind. Typically, couples think of asset division as dividing up real estate property and figuring out who gets what knick-knacks around the home.

But some couples may not realize that dividing up the property also impacts retirement plans. In fact, the later in life that a couple separates, the greater the financial impact a divorce can have on both individuals.

There are already a number of ways that life can change after a divorce and financially affect a couple. Issues like child support and alimony can shift income expectations for both sides. This shift can become even more apparent as the couple begins to divide up the property.

One financial advisor noted that many couples do not realize that divorce can affect things like:

  • Credit - if a couple does not have individual credit history, it can make it difficult to apply for credit cards or loans
  • Health insurance - divorce can eliminate eligibility for one spouse who had been covered under the other's insurance
  • Long-term care insurance - similar to health insurance, coverage may end after a divorce

Dividing up property in general can be a challenge. In Florida, couples have to determine what property was acquired during the marriage. Once those have been distinguished, the court will divide it between the couple.

If you are going through a particularly challenging or frustrating divorce, it can be important to take steps to protect your financial future. While many couples choose to reach an agreement together, having an advocate for your interests can help both parties reach a solution.

Source: The Wall Street Journal, "When Divorce Unravels Your Retirement Plans," Ruthie Ackerman, Dec. 24, 2011