The division of assets during a Pennsylvania divorce is never easy. The emotional aspects of “letting go” and the legal and financial complexities can be overwhelming. Issues surrounding the division of assets in a divorce, though, can often be even more complex for individuals over the age of 50. Because these spouses usually have many years of work and savings behind them, and are nearing retirement age, the property division processes often includes pension plans, IRA accounts, real estate property and other complicated financial assets.
Experts familiar with the challenges faced by 50-plus individuals undergoing divorce suggest that they consult with a financial planner as their first order of business — even before they seek advice from a divorce attorney. Financial planners, especially planners who are familiar with divorce proceedings, can help spouses gain a bird’s eye view of their complete financial picture. Retirement plan laws, tax consequences of asset division and future predicted retirement incomes are important things to know about before initiating the divorce process.
A financial planner, forensic accountant and other types of financial experts can assist divorcing individuals to hunt down assets and accounts they may have overlooked otherwise. After completing a thorough inventory of finances like this, it is also vital to take into account future tax liabilities that could apply to those assets. For example, a large IRA account may not be as valuable to a spouse because the money will be taxed if a spouse wishes to have complete access to the funds inside it. Similarly, investment assets that have made huge profits will be subjected to capital gains taxes if liquidated. In this sense, hidden tax consequences could reduce the face value of certain financial assets and this must be taken into account in order to fairly divvy up assets during a divorce.
The more one knows going into a divorce, the better off one will be by the time it is finished Ã¢â‚¬â€œ financially, legally and emotionally. Fortunately, by relying on expert legal counsel and accountants, Pennsylvania residents over the age of 50 can protect their rights during the division of assets process to make they are treated fairly.
Source: Tampa Bay Times, “Late-in-life divorce perils retirement plans,” June 27, 2014