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There are many factors that can make divorce a long and complicated process. While people who are going through a divorce often expect the hassle of divvying up possessions and the possibility of a contentious custody battle, they often don’t think about the long term factors that need to be ironed out, such as how retirement investments are divided. But while dividing retirement assets might not seem as pressing as other terms in a divorce, such as dividing property, it’s something that should be handled as soon as possible.
Since Michigan is a marital property state, property isn’t always divided in half during a divorce. Instead, it is evaluated and divided as fairly and equally as possible. Retirement assets are treated the same way. The following are the most common retirement assets that divorce attorneys divide.
- IRAs
- Stocks
- Bonds
- 401(k) and 403(b) assets and other forms of deferred compensation
- Pensions
An attorney must thoroughly evaluate each retirement asset in order to ensure that they are properly and equally divided. This is especially important when a divorce involves a vast and complex estate. There are also crucial tax considerations that you must keep in mind to ensure that the remaining retirement accounts comply with IRS regulations. As a retirement account is divided, the amount that is awarded to the ex-spouse who does not own the account should be transferred into a new or existing IRA in his or her name in order to avoid hefty interest fees and tax penalties.
If you’re going through a divorce and you haven’t yet determined how to divide your retirement assets, it’s important to act quickly. The attorneys at Bailey Smith & Bailey have years of experience working with every aspect of divorce. Contact them today to schedule a consultation and to learn how they will fight hard to ensure that you get every penny you deserve.