When you and your spouse decide to call it quits in Colorado, you are essentially untangling not only an emotional bond but also a financial one. This can be intimidating whether you have been married for a few years or a few decades, but it can especially be unsettling if you are drawing near retirement. The splitting of retirement assets during your divorce proceeding can have a profound effect on your retirement plans in the coming years.
According to Colorado law, both parties during a divorce have the right to get equitable shares of one another's retirement accounts. To make sure that the division of both of your retirement accounts is fair, accurately determining your retirement asset's fair market value is necessary. You can recruit a seasoned expert to help with unearthing the true value of your asset.
Types of retirement assets
A wide range of retirement assets may need to be split during your divorce proceeding. These include, for instance, IRA accounts, 401(k) accounts and pensions, including military pensions. Other assets that must be divided include trusts, stock options, money market accounts, profit-sharing plans and Public Employees' Retirement Association accounts.
QDRO and an attorney
Unfortunately, certain retirement accounts will trigger a major tax bill following their distribution. Other accounts may be divided without causing major tax headaches, but the process may not be as simple as simply dividing an account to form two accounts. When dealing with the splitting of retirement assets, it may be helpful to obtain a qualified domestic relations order, or QDRO. This is a court order that details the right procedure for distributing your retirement assets in the future.
The QDRO enables your benefit plan administrator to move forward with distributions as though you and your ex are still married, making sure that both spouses get their rightful benefits. The QDRO also helps to resolve issues that might arise if either you or your ex remarries, with current spouses and ex-spouses getting proportionate shares of the plan distributions.
A knowledgeable attorney in Colorado can help you to navigate the processes necessary to ensure that funds are split in a fair manner during your divorce proceeding. In addition, an attorney can represent you at trial if you and your spouse cannot resolve your asset division issues on your own through processes such as divorce mediation or negotiation.