Pennsylvanian spouses at the end of a marriage usually understand the importance of dividing significant martial property, such as homes and cars, and addressing other divorce issues, such as spousal and child support. Other important property, however, may be overlooked, particularly in a high asset divorce, because of the difficulty associated with locating and dividing these assets.
Retirement plans, stock options and other types of stock and deferred compensation are complicated. These financial assets, and other property and earnings acquired during marriage, may be overlooked. But, it is essential to know how to locate these assets and determine their worth.
Property division needs to be fair, and not necessarily an equal 50-50 split. An equal split of retirement savings may not be beneficial for the spouse with lower income who may not be able to rebuild savings quickly or for a stay-at-home parent who took time away from work. Women also normally live longer than men and, as a result, need more retirement funds.
Various investment funds are taxed differently as well. Taxes on certain retirement plans may also increase in the future.
A Qualified Domestic Relations Order (QDRO) may have to govern dividing certain pensions and 401(k) type plans. A QDRO is an often-complicated court order that directs the plan administrator how benefits should be paid and the recipient.
Spouses should consider taking out a life insurance policy on their former spouse to cover the time until the spouse's financial obligations are completed. For example, retirement benefits may be loss if a spouse dies before the QDRO is enacted. A settlement agreement can incorporate this insurance obligation to cover a period of uncertainty or a long-term policy covering the period of spousal support.
Spouses should also consider their own death and providing for their children's financial affairs. If their former spouse is financially irresponsible or reckless, another responsible adult should be sought to govern these affairs. A surviving spouse can take unreasonable actions, such as taking this income to support their own lifestyle or putting the needs of their second family first.
An attorney can help seek a fair and reasonable property settlement. These assets may be located and properly valued with this legal expertise.
Source: Forbes, "Divorcing women: Don't lose out on funds you're entitled to," Jeff Landers, Dec. 7, 2016