Dividing pensions, retirement funds in divorce

On behalf of The Marks Law Firm, L.L.C. posted in Divorce on Thursday, June 14, 2012

Just as marriage isn’t exclusively for the young, neither is its counterpart, divorce. In reality, between 1990 and 2009, the divorce rate among older adults doubled. About one quarter of all divorces in St. Louis and across the nation now occur among those over the age of 50.

A recent Forbes column addressed some property division issues that can be of interest to women in that age group, though the advice can certainly be applied to men in similar circumstances.

For people over 50, retirement funds, Social Security and pension plans are all likely to play a major role in coming to a divorce agreement. Naturally, there are plenty of people below 50 who also have similar significant assets that would also have to be sorted out in a property settlement.

The problem for sorting these issues out is that the matters can be extremely complicated with major tax repercussions. Another problem Forbes columnist pointed out: some attorneys are simply not equipped to handle complicated property settlements so they don’t adequately represent their clients’ interests in negotiations.

Something for all concerned parties to consider as they ponder divorce: retirement funds accumulated during a marriage are typically considered marital property to be divided equitably.

However, if the husband or wife entered the marriage with a retirement account, those funds would be likely considered that individual’s property and not subject to division with their ex.

It’s critical, Forbes says, for your divorce agreement to spell out exactly how these retirement account funds and pension plans and similar assets are to be split and transferred.

Source: Forbes, “How Divorcing Women Should Handle Retirement Accounts and Pension Plans,” Jeff Landers, June 13, 2012

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