A gray divorce is simply one where people are at retirement age or their children have all grown up when they decide to split. These types of divorces usually don’t have custody problems to deal with, but there can be other issues that have to be addressed. One of the biggest issues with gray divorces is the issue of splitting up retirement plans. By the time New Yorkers are older, they may have a decent amount of money set aside for retirement. Splitting that money up during a divorce can be tricky.
What types of retirement accounts are at issue during gray divorces?
A 401(k) is one of the most common types of retirement accounts that need to be split up during a divorce. The good news is that a 401(k) plan is usually easy to split up. The amount in the plan is straightforward, so the couple simply needs to decide how much each party in the divorce will get. They can decide to split it evenly, or they can split it based on other factors.
A pension is more difficult to divide. When it comes to splitting up a pension during a divorce, employers may have specific rules about how that pension can be split up. In addition to employers having their own rules, some states also have their own rules. If one of the spouses was in the military, you’re looking at additional issues regarding splitting up a pension.
What can a divorcing couple do when it comes to splitting retirement funds?
A divorcing couple may benefit by working with attorneys who have experience with complex asset division in divorce cases. Family law attorneys may help their clients all of the ins and outs regarding state laws and employer clauses.