A couple that is going through a divorce may understand the difficulty of finding a mutually satisfying divorce agreement while remaining amicable. This can be particularly true when it comes to dividing retirement funds.
Retirement accounts are frequently among a couple’s most valuable assets. It is therefore crucial to take particular care when dividing them divorce arrangement. There could be major consequences—such as tax penalties, high fees and legal complications—if not done correctly.
If you are considering how to divide your retirement funds in a divorce, continue reading for a few important things to keep in mind.
Include every account
Remember to include every possible retirement fund available when you are splitting assets in a divorce. Don’t overlook any retirement accounts that you might have. Dig up everything, including old pensions that you may have forgotten about. Otherwise, you might miss out on important assets.
Don’t try to DIY
Doing the legal steps on your own might sound tempting, but don’t be fooled: This can end up much messier than you planned. Some couples are may try to divide their retirement assets themselves in order to avoid the legal process and remain amicable, but this is not usually wise. Any minute details that are not properly handled can cause big headaches and bigger fees.
Find a good fit
When seeking a professional to assist with a divorce, there are some important things to consider. You should choose an expert who has an extensive background in dealing with finances, retirement accounts and high-asset divorce. Mediation is also an option for couples who would like to avoid extensive litigation. A mediator can help spouses come to a resolution that is fair for both parties.
Pensions take planning
Dealing with pensions in a divorce can be very legally complex. Each pension fund tends to have its own set of rules and limitations that must be observed. If the rules are not handled correctly, there could be major repercussions.
Consider every option
Finally, you should take every available option for dividing your retirement accounts into careful consideration before you make any decisions. A fifty-fifty split in the present day is not always wise if the fund could have long-term growth potential. To find the most satisfactory conclusion for each party, weigh every possibility carefully.