Relationships have their ups and downs, and most couples know when the downs have hit rock bottom with no way to go back up. What was once a lifelong commitment founded on a friendship and love can deteriorate, and severing the ties that bind may be the only option. The monetary aspect of a Connecticut divorce and what follows may not be given a thought until the inevitable is fast approaching. Money is property and dividing up the marital assets is one of the biggest aspects of a divorce. Making the preparations, should a divorce occur, does not guarantee that it will happen, but it does offer a sense of financial security should it become a reality.
Many young married couples do not have a financial plan in place should a separation or a spouse’s death occur. One suggestion is to contact a financial planner to disclose all assets and money, which includes retirement accounts, as soon as the word “separation” enters discussions. Having all the paperwork at hand is crucial in helping to ensure that each party gets his or her equitable share.
Many divorcing couples consider an Individual Retirement Account as just that — individual. The reality is that any monies placed into the IRA during the marriage is considered joint property and can be split by a divorce decree and not incur any capital gains tax. Understanding how retirement accounts can be divided during a divorce helps one to understand the financial impacts after a marriage has ended.
Engaged couples who are contemplating marriage may wish to understand the financial implications that a possible divorce or the death of a spouse can create. Each soon-to-be partner, with the advice of Connecticut attorneys, can begin to prepare a financial safety net for the future, including the possibility of divorce or the death of one or both parties. For those who are ending a marriage, understanding the division of marital assets helps to ensure that each party leaves the relationship and is able to be self-sufficient.
Source: thestreet.com, “How Divorce Affects Social Security and Retirement Accounts”, Robert Powell, Dec. 15, 2017