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Dealing with retirement during property division talks

Divorcing couples in Georgia often focus on their immediate needs during property division negotiations, but the decisions they make can cast very long shadows. These discussions frequently become mired in acrimony over assets with high sentimental values, and people sometimes make decisions that jeopardize their long-term financial security in pursuit of short-term goals.

Dividing retirement accounts can be a particularly thorny issue during property division talks. Making changes to retirement plans can incur fees and have tax consequences, and people should take these factors into consideration when addressing these matters. When withdrawals must be made, it may be prudent to take the money needed from Roth IRAs because these contributions are taxed upfront. Timing is also a factor as both traditional and Roth IRA assets must be divided within a year of the formal divorce date to avoid taxation.

Divorcing spouses may also be wise to familiarize themselves with the way that the Social Security Administration treats divorce before entering property division talks. Divorcees who were married for 10 years or longer are able to claim Social Security benefits based on the contributions made by their ex-spouses, and they can begin receiving these benefits at the age of 62 even if their former husbands or wives are still working or have remarried.

Experienced family law attorneys may suggest alternative approaches when traditional property negotiations fail, and this could be especially true in high asset divorce cases. The adversarial nature of court proceedings can deepen resentments and make amicable settlements less likely, but collaborative law and mediation are based on cooperation and finding common ground. This kind of atmosphere leads to less myopic and more productive discussions, and resolving contentious issues in this way allows spouses to avoid prolonged and public litigation.

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Hecht Family Law
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