Divorce can occur at any age and to anyone, even retirees who live in Illinois. One of the trickiest parts of divorce is property division, and this becomes even more complex when considering retirement assets. These assets include 401(k)s, IRAs and annuities, but they each get divided in a different manner.
The division of 401(k)s
The process for the division of a 401(k) after divorce can be complex. You need a qualified domestic relations order to split the asset. Your spouse has the same rights to the account as you have, so this can make the process messy. Consider an equal division, an exchange of the asset, an asset liquidation or a rollover of the asset into an IRA.
The division of IRAs
The simplest retirement asset to divide after divorce is an IRA. Any funds that came to the IRA after the marriage are dual property while those added prior to the marriage only belong to the owner of the funds. Be sure to review all rules concerning an IRA, however, as the owner is in charge of the distribution of funds.
The division of annuities
The most complex retirement asset is an annuity. It is easiest to come up with a new contract for each spouse. This means that your old annuity contract will be invalid and null. It is important to discuss this account with a lawyer or financial advisor to determine the best method for you and your spouse after divorce.
Though property division can become messy and overwhelming, you can get through it with a legal professional’s help. Your family law attorney may assist in the entire division process during divorce, including the division of retirement assets.