The house, the investments and the debt — divorcing couples in Colorado almost always expect to address these types of assets during property division. But when preparing for a divorce, there is one important account that most people tend to forget about. When married couples plan for retirement, they usually do so with both people in mind, stashing any money away in a retirement account a joint asset.
It might be difficult to over exaggerate the importance of retirement planning, which is why it should never be left out of a divorce settlement. If only one retirement account exists, there is no need to close it down and divvy up the money. Instead, upon retirement age, one party is usually entitled to a certain amount as specified in the agreement, or he or she might even be able to receive a lump sum before that time.
The issue is less straight forward when both parties worked and maintained more than one retirement account. It can unfortunately be extremely tempting to tell a soon-to-be ex to keep his or her account while you will hang on to yours, but it is rarely the best option. Depending on each person’s respective income and the varying amounts in each retirement account, it can be a financially smarter decision to include these accounts as marital assets that need to be divided.
When one spouse worked while the other did not, it can be difficult to understand why the retirement account that only one person contributed to needs to be split. Conversely, people who earn significantly less than their ex might already be worried about rebuilding what had previously been a healthy retirement plan. Our Colorado clients have benefited from our years spent in the family law arena, and we understand how important it is to ensure that everyone involved receives the most fair divorce settlement possible.