People in Florida who are considering getting a divorce often want to get the process over with as quickly as possible so they can put all the emotional baggage behind them. However, in their hurry to do so, they might make the mistake of putting off settling important issues such as splitting up retirement assets. Financial advisors say that doing so could prove to be a big mistake.
The first retirement asset that people should worry about splitting up is their IRA accounts. When people going through a high net worth divorce attempt to split up the interest from their IRA accounts, they might want to consult with tax professionals to ensure they don’t incur tax consequences. If split up in the appropriate manner, they can avoid negative tax repercussions.
According to financial advisors, one way that people can ensure their retirement accounts are divided up appropriately is through the use of qualified domestic relations orders, which specify how retirement accounts such as 401(k)s and other workplace retirement plans are to be divided up among ex-spouses in percentage values.
People might also want to update their beneficiary designations on their retirement accounts after they get their divorces. Although many states automatically remove ex-spouses as the beneficiaries under state laws, they might not always do so. Therefore, people should ensure that they update their beneficiary designation forms to ensure that their intentions will be honored.
A Florida attorney with experience in divorce law might be able to assist people in the process of getting their divorces. Such an attorney might be able to help them negotiate issues such as division of property, alimony, child support and child custody in a more amicable manner than they might have been able to do so otherwise.
Source: Fox Business, “How to Split up Retirement Assets in a Divorce”, Marilyn Bowden, September 16, 2013