Many individuals seeking a divorce may wish to rush through the basics to get closer to the final divorce decree. Individuals or couples seeking a divorce may, at times, hope to go through a proceeding without representation. Some pitfalls, or oversight of the issues, can arise in many areas, especially if all of the “I”s are not dotted and the “T”s are not crossed.
Take for instance retirement assets. Many people seeking dissolution of marriage may tend to overlook retirement assets when dividing property. In many cases, retirement accounts or pension plans may fall into the category of marital property. Some people carry significant assets in a retirement account.
While retirement assets can be included in many cases in the marital estate, simply making a distribution can incur tax liability. Similarly, if the issues are not properly addressed in the legal documentation, unintended consequences may flow.
Dividing retirement assets may involve legal paperwork that can help to ensure that the assets will be properly taken care of. Many Columbia, Missouri, area residents may be aware of the tax liabilities and penalties that can attach to distributions of retirement assets. Transfers of funds, if not accomplished properly, can also lead to unintended consequences.
Many retirement programs require specific documentation to properly accomplish a division of the assets. A document known as a Qualified Domestic Relations Order is generally recognized as a necessity in dividing retirement assets in a divorce—but proper drafting of the document is vital.
Missouri residents seeking dissolution of marriage may wish to consult with financial professionals or a divorce lawyer to help avoid pitfalls in how assets are divided in a divorce.
Source: FOX Business, “How to Split up Retirement Assets in a Divorce “, Marilyn Bowden, Sept. 16, 2013