Going through a divorce can be quite complex, especially when conflict arises over a variety of legal issues. Divorcing parents may fight over child custody and child support, one spouse may seek alimony, and the couple may disagree over how to divide marital debts. Property division disputes are common in a divorce and often necessitate legal assistance to settle the matter. While Massachusetts couples often address many physical assets such as cars and homes, they should not neglect to address retirement accounts and pension benefits.
In many instances, retirement accounts amount to the largest portion of a couple’s assets. The division of investments, pension plans, and other accounts could mean the difference between starting a new life on firm financial footing and being financially devastated. To ensure the former, a divorcing party should seek legal assistance. A Massachusetts Divorce Attorney can aid in negotiating with the other side, which may include mediation, in order to reach as favorable of an outcome as possible.
A lawyer can be pivotal in drafting the legal documents necessary to ensure a positive resolution. If a retirement account is divided into specific amounts of money, for example, one couple could be hung out to dry if the account loses money. For this reason, it may be best to split retirement accounts on a percentage basis, ensuring each party gets a fair share.
A divorce attorney can also help a divorcing party understand the tax implications of splitting retirement accounts. By handling the division of assets properly, a divorcing party may be able to avoid many of these taxes, helping them start off on the right financial foot.
Additionally, those who are divorcing should be sure to change beneficiary designations. Failing to do so could lead to unwanted consequences, such as allowing an ex-spouse to receive life insurance payouts. An attorney can go through various accounts with a divorcing party and can assist in changing them accordingly.
Source: Business Day, “How to divide your retirement assets in a divorce,” Dec. 31, 2013