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Property division tips for older adults in a divorce

by | Aug 6, 2018 | Property Division |

The Pew Research Center reports that older couples are divorcing twice as often as they did in the 1990s, and this means that more Arizona couples who divorce may be dealing with complex financial matters. The increasing popularity of annuities means these are a growing factor in divorce, but the rules associated with them are complicated, and they may lose value when divided. Some couples prefer to trade assets instead of trying to split them.

Various kinds of retirement savings can also present challenges in a divorce. For 401(k)s and pension plans, people will need a qualified domestic relations order to divide the account. Pension plans may also have specific rules that need to be followed. A QDRO is not required for an IRA, but there are other special considerations for an IRA. Both a 401(k) and an IRA can be directly rolled over into another IRA to avoid taxes and penalties.

Because of these types of financial complications, some couples opt for a collaborative approach to divorce. With this approach, they each have their own attorneys but share a financial team. The object of this type of divorce is to try to reach an outcome that increases the likelihood of financial stability for each person and satisfies them both. It may allow a more creative approach to property division than litigation.

People who are considering divorce in Arizona should be aware that it is a community property state. This means that most of the property either party has acquired since the marriage is usually considered shared property. Exceptions may include an inheritance that has been kept separate from the family finances. Even if the divorce is contentious, it might be in the best interests of both people to try to negotiate an agreement for property division instead of fighting in court.