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Dividing Your Retirement Accounts during Divorce

With the rising rate of divorce among the baby boomer generation, discussions about retirement accounts have taken center stage. It makes sense, especially when you consider the impact that a divorce can have for those in the later stages of life. If you are planning on filing for divorce and are reaching retirement age, be prepared, know how retirement assets will be divided, and learn how you to effectively manage your risks.

How Retirement Assets Are Divided in Illinois

Illinois is an equitable distribution state. Essentially this means that, unlike equal distribution states, where everything is split down the middle, divorcing couples in Illinois everything "fairly." Sadly, the obscurity of this concept of fair can create a lot of contention in divorce. This is especially true when the stakes are high - like when your financial stability during retirement is on the line.

Potential Problems in a Later Life Divorce

Years of saving for retirement, a nest egg that is ample enough to cover one household, must now be split in two. With little to no working time left, there is no time to really recover. That can lead to all sorts of problems, from divorce-induced poverty to an increased risk of asset hiding during the divorce process. It can also lead to bitter feuds between couples who might have thought they would have a fairly amicable divorce. For these reasons, and many others, all later-life divorcees should seek skilled legal assistance with their divorce.

Retirement Account Considerations

While your divorce attorney can (and should) walk you through the divorce process, there are a few retirement account considerations that you may want to start thinking about now. For example, if you are approaching retirement age but have not quite reached it, you will need to take a good look at your retirement account and whether or not you want to actually withdraw it since withdrawing early could carry some serious tax penalties.

Also, if you are the spouse that does not actually "own" the retirement account, carefully consider whether or not you would be willing to take another asset over your share of the retirement account. Remember that you will also be financially responsible for that asset once the divorce is over. So, if you are thinking of taking the house, which has sentimental value for you, try to think realistically. Can you realistically cover the mortgage, homeowner's insurance, repairs, and regular maintenance?

Lastly, watch for any signs of asset hiding, like disappearing documents, depreciating assets, and missing valuables. Though it may be hard to think of your spouse as someone who might act deceptively, fear and stress can make even the most honest of people behave uncharacteristically. This does not make them a bad person. It just means you will need to be more aware and diligent in your divorce.

Contact Our DuPage County Divorce Lawyers

Whether you simply need help navigating the divorce process, suspect that your spouse may be hiding assets, or need assistance in protecting assets that should not be considered marital property, The Stogsdill Law Firm, P.C. can help. Dedicated to your best interest, we will aggressively fight to get you the settlement that you deserve. Call 630-462-9500 to schedule your consultation with our Wheaton, IL divorce lawyers today.

Sources:

http://www.cnbc.com/2016/09/06/memo-to-divorcing-boomers-watch-your-assets.html

http://www.ilga.gov/legislation/ilcs/ilcs4.asp?ActID=2086&ChapterID=59&SeqStart=6000000&SeqEnd=8300000

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