Most people recognize that divorce is complicated. But the longer you were married, the more children you have, the more money you have, then the more complicated your divorce will be. Even the most amiable divorce can be a logistical nightmare.
When you begin your divorce, you will need to consider many details. One of the most important will be your retirement, investments and pension. The decisions you make about these assets now will alter your future significantly.
Yes. Your ex may have a claim to your pension and retirement accounts.
Massachusetts and most other states look at your pension as a part of your marital property, especially if you accumulate your funds during your marriage. With the exception of couples who have a prenuptial or postnuptial agreement, your assets are subject to an equitable division.
This may sound like bad news, but there is a silver lining. Because the courts look for agreements that are fair, as opposed to simply a 50/50 split, you have negotiating power. You may be able to maintain your investments, or a part of them, by offering a less personal or lower priority asset. This also means, though, that your options are going to be complicated and may be difficult to discern.
How a mistake with your retirement or pension can come back to haunt you
Because Roth IRAs, 401(k)s, pensions and other accounts have complex tax burdens, any decision you make about your investments can have a multiplicative effect. A seemingly beneficial agreement may mean that you now also have to pay fines, withdrawal fees or taxes long before they should be due. For some accounts, the penalties could be very high, and a mistake today can lead to even more expensive fees later, when you should be relaxed and retired.
In short, you need to work with someone who knows what they are doing. Legal and financial experts can help determine what paths lead to the least fines and taxes, how to preserve as much of your savings as possible and other routes to preserve your future.