When getting a divorce, investment and retirement accounts are typically
afterthoughts. In reality, these accounts could hold thousands of dollars
that need to be carefully divided. Accounts and their contents require
a careful examination before a "fair" division can be determined.
Many retirement accounts have their own rules on tax treatment and access
to the money. Investments can have different tax liabilities which will
have a large impact on how they are divided at the time of divorce.
When dividing retirement and investment accounts, the Wall Street Journal
suggests that you should be fully aware of what you own. Couples need
to make an inventory of their investment holdings, including all joint
or individually owned accounts. They shouldn't forget any older accounts,
stocks, or bonds as every account can become a point of contention later
on. In some cases, it may be wisest to hire a forensic specialist to locate
every single account, especially if your finances are widely spread.
Also, you will want to weigh all dividing retirement accounts. Spouses
can't simply walk away from their marriages with money in their own
IRAs and 401(k) plans. It is also possible as part of a divorce to transfer
some of those assets from one spouse to the other without any immediate
taxation or penalty, so you will want to talk with your lawyer to see
how these different arrangements will affect you.
You will also want to be diligent with your investments after the divorce
and make sure that every detail that was discussed is executed properly.
Otherwise, huge sums of money could end up with the wrong party. For example,
when arranging for the division of a Qualified Domestic Relations Order
you will need to have a plan administrator approve the transfer before
it can take place. Read more about this on the blog today and hire a Los
Angeles divorce lawyer if you want to carefully arrange the division of