If you are going to file for divorce this year, you are in good company. More than 800,000 people get divorced each year. While the end of your marriage is something that might be difficult to deal with, you might find that the impact on your finances is even more difficult. There are several things that you can do to protect your finances if you are filing for a divorce this year.
If you are dividing retirement plans, you might find that things get very difficult. Finding the value of a retirement plan isn't as easy as just looking at the most recent statement. Instead, the future value of the plan, as well as the value after tax implications has to be considered when you are dealing with these accounts.
The type of retirement account you have is another factor that can impact the way that account is handled in a property division process. Generally, Roth IRA are more valuable than traditional IRAs because the taxes are already paid. This is only one example of how the type of retirement account can impact your case.
Find out if you need a qualified domestic relations order, which is used to divide retirement accounts in a way that minimizes the financial hit you take during the division. This often involves a lengthy process, so make sure that you get the ball rolling as early as possible. This has to be approved by the court, can have an impact on property division and must be approved by the retirement plan.
There are a host of other considerations that could apply to your case. Meeting with the appropriate parties to determine what points need to be addressed in your case is a crucial step that can help you to protect your interests during the divorce process.
Source: U.S. News, "12 Steps to Protect Your Money in Divorce," Christine Giordano, Aug. 15, 2016