Gray and senior divorce on the rise: Dividing retirement assets in California. A key issue.
With gray divorce on the rise, couples need to carefully consider how to split retirement assets.
Media outlets across the country are highlighting new studies that report the divorce rate for those over the age of 50 is on the rise. The study, out of Bowling Green State University, notes that the rate for divorce within this age group has doubled between the years of 1990 and 2010, researchers’ estimate that one out of four divorces in 2010 were for couples over the age of 50.
These statistics support the notion that more and more couples throughout the country will need to carefully consider how their retirement years will be spent. For some, this prospect may be exciting, for others it is daunting. Whatever situation you may currently find yourself in, one thing is clear: retirement assets, also called deferred compensation including 410K’s and IRA’s as well as pensions must be carefully managed during the asset division portion of the divorce proceeding.
Asset division and retirement accounts in California
Without careful planning, an individual can ultimately lose a great deal of money when retirement assets are divided. Retirement assets continue to grow even after the divorce, and careful planning can help ensure that you still receive your proper portion of these payments. The first step is to gather information about all deferred compensation accounts, property, bonds, business interests and other assets that are present in the marriage. Once this information is available the division can be planned.
It is important to make certain that all retirement assets are accounted for. Be sure to note if your spouse was employed with another employer, served time in the military or had separated accounts. Any pension, 401k, and defined contribution plans should be included in the discussion.
In California, a variety of paperwork and court orders are required to divide deferred compensation plans and accounts. For example, the Attachment to Judgment form is one of the required orders. Essentially, this order is intended to provide information about the account and inform the administrator of the plan that payments can be made to the parties. Pensions also generally require a QDRO, or qualified domestic relations order, to provide the details of how this asset is divided.
Although having a basic understanding of how the process works is helpful, the rules governing the division of retirement accounts in California are complex and often change. As a result, those who are going through a divorce are wise to seek the counsel of an experienced California divorce lawyer. Your lawyer will draft the proposed division, guide you through the process and help to better ensure that you receive a favorable and proper division of these assets.
Keywords: divorce retirement