If you are contemplating 401k alimony and other kinds of asset division, an attorney can help you assess your situation.
Divorce and Division of Assets
Division of assets is handled differently in every divorce case, but here are some things you should consider regarding this step if you are facing divorce:
- If you live in a community property state, all assets and debts acquired during marriage are considered community assets and are divided equally at divorce. This can include contributions to retirement accounts such as 401k accounts.
- Spouses have the right to make agreements about issues in their divorce case if they do so before the court intervenes. This means you can work with your spouse to decide who will receive assets such as a 401k.
- Asset division will be decided based on the big picture. There are often trade offs being made in a divorce case. For example, you may ask if you can keep your 401k in exchange for some other asset. Also, the amount of money each party earns and the roles of the parties during marriage can effect the outcome of property distribution.
- Tax implications for retirement assets are different. Sometimes tax is deferred until the money is received. Thus, you should consult a tax attorney about the best way to deal with retirement accounts in divorce.
- If pension plans are contributed to during marriage partially and prior to or after marriage, you will have to calculate the amounts that were contributed at each time to figure out how much is part of the marital estate.
- Some spouses opt for a lump sum payout on retirement benefits. Talk to your attorney about whether this is a good idea in your case.
- If you use the legal system to handle your divorce, the distribution of assets, if you cannot come to an agreement with your spouse, will be decided by the court. There are other methods for divorce such as collaborative proceedings. A collaborative divorce allows you to take some of the control back and is great for couples who are willing to negotiate and come to an agreement.
Getting Legal Help
If you are facing bankruptcy and the division of marital assets, you need to contact an experienced family law attorney to find out your rights. An attorney can simplify the divorce process and help you understand how your assets may be divided.
