Divorce is one of the most stressful life events that a person can experience. One of the stressors of dissolving a marriage is the uncertainty over finances. The division of assets can be difficult and feel very personal.
Your real estate, physical property, investments, and money are all on the table in a divorce. This financial insecurity naturally creates anxiety. If you are divorcing and have questions about how your assets are to be divided, seeking an experienced Los Angeles divorce attorney can help you manage your concerns and protect your assets.
Retirement Plans and Pensions in a California Divorce
There are things you should do to protect your retirement accounts and the right to benefits if you are facing a divorce. Since retirement and pensions are considered primary assets in a divorce decree, there are steps you should take. These are as follows:
- It is vital to understand the regulations surrounding your retirement plan and the kind of oversight applied to its division.
- Pension benefits are complicated to divide, so you will want to hire an experienced divorce attorney to help manage how that is handled.
- The division of assets into assigned contribution plans or individual retirement accounts (IRAs) is much simpler than the pension benefits division. But it will still be in your best interest to have it overseen by a divorce lawyer.
- Ensure that your paperwork is all filed or submitted promptly throughout the process.
Protecting Your Retirement
Most retirement accounts and plans have detailed instructions about the procedures that are required when dividing assets in a divorce. Knowing those rules can protect you from forfeiting access that you are entitled to in the divorce.
You must be prepared when considering a divorce, protecting yourself financially, or acquiring assets needed to retain your financial stability.
Know the Rules
As we mentioned above, knowing the rules for your account’s division better prepares you to assess what you will keep or be required to give away. You will be required to share your financial information in its entirety with your spouse. You will be able to see which accounts are eligible for division.
Debts inside retirement plans are jointly owned, as a rule. So, if the participating spouse removed $100,000 from their 401(k) plan with $400,000 in assets, then the division would be calculated on the remaining balance. But, at times, there is a requirement to repay the loan before proceeding with the division.
Carefully Review Your Social Security Benefits
A marriage lasting for ten or more years may entitle the spouse to a portion of their former spouse’s social security benefits. Some couples approaching the ten-year mark may hold off on the divorce and move forward with a legal separation until they have reached ten years of marriage. This could be used to preserve some vital retirement benefits if one spouse made significantly less money than their partner.
Pay Attention to Survivorship
When divorcing, it is important to be listed as a survivor or beneficiary on your spouse’s retirement plans. This way, you can collect the benefits you are owed, even if they die. It is important to sign these forms and keep copies for future reference.
If serious medical issues are involved, such as a terminal illness, it is imperative to plan for custodians as soon as possible. Settling an estate of an ex-spouse can be incredibly challenging. Having as much of the paperwork done before tragedy strikes is the best way to protect yourself in a divorce.
Protect Your Retirement
Divorces are challenging. Working hard to save a retirement nest egg is challenging as well. Protect your financial future by ensuring that your retirement accounts are safeguarded. The experienced legal team at Martin Family Law Group is ready to advise you on the best way to protect your future.