Asset division can be a headache during a separation, especially if it isn’t an amicable one. Connecticut residents who have been through a divorce can confirm that fighting about money is quite often a leading cause of divorce, and it doesn’t always end at the settlement table. However, it is important for both individuals to have a full understanding of what constitutes an asset, and that includes retirement savings.
Depending on the kind of account being discussed, it can fall under different legal arms. For example, an IRA savings account is handled on the state level, but a 401k is handled federally. There are many different ways to invest in retirement, so the first step is knowing what a spouse has set up — and if they are not forthcoming with the information, it isn’t uncommon to seek legal support in obtaining that information from an employer.
Connecticut is an equitable distribution state, which means it is up to the divorce court to determine who gets what in terms of asset splitting, as opposed to dividing everything 50/50. In the case of retirement funds, the value of the savings can be used as leverage to accrue a different asset. If the value of a retirement package is equal to that of a family home, an arrangement might be made to leave ownership of the home to one spouse and the full retirement package to another.
There are many ways asset division can play out in a divorce setting. Connecticut residents are reminded that knowledge is power even in the most amicable split. A full understanding of the ramifications of how assets will be divided can be beneficial at the settlement table.
Source: The Huffington Post, “The #1 Most Overlooked Divorce Asset”, Daniel Sentell, Oct. 2, 2014