Dividing assets accrued over the course of a marriage can be one of the most stressful parts of a separation. Connecticut residents who have been through a divorce will understand that money is often the biggest point of contention in a divorce. This is why it is so important for both parties to be educated on the state and federal laws that govern the division of complex assets, such as retirement savings.
Depending on the type of savings accounts and plans opened by the couple, different rules and regulations apply during their division. For example, a 401(k) can be divided through the use of a Qualified Domestic Relations Order. This document removes the penalties and taxes normally associated with early withdrawal of such savings and allows for the fund to be divided according to the law.
Connecticut is an equitable distribution state, which means that assets may not be divided "evenly" but instead equitably and at the discretion of the court. Seeking support in determining how this law will influence an individual divorce case can benefit both parties. It will determine who will receive the majority of retirement savings.
Ultimately, knowledge is power in a divorce situation. Connecticut residents are urged to learn more about how divorce will influence their personal finances, including savings for their later years. In the end, a better understanding of all elements of the divorce process can be a huge help toward settling a divorce amicably and in the best interest of both parties.
Source: Time, "Who Gets Retirement Accounts in a Divorce?", AJ Smith, Nov. 16, 2015