Managing the Future
When a couple divorces in Colorado, one of the most important decisions they will make is how to divide their assets. This includes retirement accounts, which can be especially complicated to divide. In this blog, learn the basics of dividing assets in Colorado and how that applies to retirement accounts.
Dividing Assets in a Colorado Divorce
When a Colorado couple gets divorced, they must divide their assets. This includes any retirement accounts that they have. Depending on when the funds were acquired, retirement accounts are usually considered marital property, so they must be divided fairly between the two spouses.
How to Divide Retirement Accounts
There are a few different ways to divide retirement accounts in a Colorado divorce. The first way is to simply split the account down the middle and each spouse gets half of it. The second way is to keep the account intact and each spouse gets a portion of it based on their age or time spent in the workforce.
The third way to divide retirement accounts in a Colorado divorce is to cash out the account and divide the money equally between the two spouses. This is usually not recommended because it can trigger taxes and penalties on the money.
The fourth way to divide retirement accounts in a Colorado divorce is to transfer the account to one spouse. This is only possible if the account is in the name of one spouse. If both spouses are named on the account, then it must be split between them.
Which Method is Best?
It depends on each couple's individual situation. Some couples may opt for the first method because it's simpler, and they don't want to deal with the complications of dividing an account. Others may choose the second method because it allows them to keep their retirement savings intact. And still, others may choose the third or fourth method because it makes more financial sense for their particular situation.
Ask Questions of an Attorney
If you're getting divorced in Colorado, talk to an attorney about your situation. At Drexler Law, our team can help you work through all facets of a Colorado divorce, including division of complex assets such as retirement accounts.
Learn more about how we can help or schedule a consultation by calling (719) 259-0050 or by visiting our website.