If you have questions about divorce, legal separation, gray divorce, or alimony in Connecticut, please feel free to call the experienced divorce attorneys at Maya Murphy, P.C. in Westport today at 203-221-3100 or email Joseph C. Maya, Esq. at JMaya@Mayalaw.com.

Gray divorce may not be a term many are familiar with, but it is a phenomenon that is on the rise. Sociologists are using this new moniker to describe the rising number of couples getting divorced over the age of 50. According to the New York Times, in 1990 only 10% of the people who divorced were over the age of 50. By 2011, that number had risen to over 25%. Mature couples face a unique set of circumstances when divorcing. Retirement accounts are of particular concern because there is less time to recover financially from the divorce before needing to use those funds. Here we will take a look at three of the most common mistakes people make with their retirement accounts during divorce proceedings.

Taking money out of retirement accounts to adjust the rights and equities between the parties

The mistake: the withdraw is taxed and penalized resulting in a 50% (roughly) net amount. The remedy is to use a qualified domestic relations order which allows us to move money without the tax consequences and without the penalty.

 

Treating retirement money like cash when dividing assets

The mistake: not realizing that retirement money is different from other money because it has been tax protected. Once it is withdrawn, it will be taxed. This is different from a cash account which does not have tax consequences.

 

Not Changing beneficiary designations

The mistake: Neglecting to change the beneficiary designations and assuming that divorce agreements will suffice. Unfortunately, that is not the case. An agreement that reflects a waiver of a retirement account will not trump a beneficiary designation. The designations must be actually changed.

For a free consultation, please do not hesitate to call the experienced family law and divorce attorneys at Maya Murphy, P.C. in Westport, CT at 203-221-3100. We may also be reached for inquiries by email at JMaya@mayalaw.com.

Source: Avvo

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