Financial Implications of Retirement in a Michigan Divorce Case
When you’re approaching retirement, many major life changes will have implications for your future, including a divorce. You may be aware that the divorce rate for couples approaching retirement is on the rise, a phenomenon colloquially termed as “gray” divorce. These situations are quite unique as compared to dissolution of marriage between younger spouses, as there are financial factors that only manifest when parties reach age 50 or older.
One primary consideration is the respective parties’ retirement plans and benefits, which it may be necessary to address and adjust in the event of divorce. If you’re nearing retirement age and are considering or currently going through divorce, you should discuss your circumstances with a Michigan divorce lawyer. It may also be helpful to read up on some important general information on retirement issues in divorce cases.
Michigan Law on Retirement Benefits in Divorce
Statutory law requires a just and equitable division of all marital property in a divorce case, which includes any assets acquired during the marriage. Retirement plans are usually considered marital property, regardless of how the asset is titled or when it was opened. The amount a party to a divorce may receive from the other individual depends on the financial circumstances of each person; a judge will consider the size of the marital estate, ages, and length of the marriage, among other factors. After the court determines a fair division of retirement benefits, payments work in one of two ways:
- In Kind or Deferred Division: A person receives an interest in the former spouse’s retirement plan, but payments aren’t triggered until the account holder is eligible to collect; or,
- Offset Division: A person receives assets equal to the amount designated by the divorce court order, but payments aren’t made directly from the retirement account.
Issues for Divorcing Couples to Consider
Divorce has an impact on income and expenses, as a two-income household becomes a single wage-earning home through the process. In some situations, it may be necessary for a party to continue working beyond what he or she anticipated before the divorce. Healthcare costs, debts, taxes, inflation, and other matters are also factors to consider.
Legal Help for Michigan Gray Divorce Cases
An experienced Michigan divorce attorneys can help ensure you get your fair share of all marital property, including retirement account proceeds and benefits. In addition, an accountant with comprehensive knowledge of applicable state and federal law can protect you from negative tax consequences that may result from asset division.
Consult with a Michigan Divorce Lawyer on Retirement Issues
There are many complex, sensitive issues involved with a divorce, and you put your rights at risk if you attempt to represent yourself in the proceedings. With the advice and counsel of a skilled divorce attorney, you can get the most out of retirement accounts and marital assets. With out advice, you too can look forward to a strong financial future. For more information on retirement and asset division under Michigan divorce law, please contact the Van Den Heuvel Law Office at 616-698-0000 or visit our website. We can schedule a consultation to discuss your circumstances at our Grand Rapids, MI office.