Retirement and Divorce in Colorado
Marital asset division is part of any divorce. During an individual’s working years, marital assets tend to increase in value and new assets are added to the marital estate. In many cases, assets are obtained and increased with the plan to use those assets to support the couple during their retirement.
After retirement, your assets work for you. Generally, you are not adding assets during your retirement, but slowly decreasing their value by using them. If you are close to retirement age or you have already retired when you divorce, your assets will be handled differently in the division process.
Dividing Pensions, Life Insurance Policies, and Retirement Plans
A Qualified Domestic Relations Order (QDRO) may be used to divide a pension or other retirement plan. This is a court order that names another beneficiary to a retirement plan, effectively splitting it between a divorcing couple.
A life insurance policy may also need to be altered in a divorce to ensure that it is divided appropriately. This not only protects both spouses, but their children or other dependents if they have them.
Dividing Savings Accounts and Investments
In a Colorado divorce, property is divided according to equitable distribution. This means that the couple should not expect perfectly equal shares of their marital assets, but appropriate shares based on their personal needs. Real estate properties, stock portfolios, business interests, and interest-bearing accounts must be valued in order to be divided equitably. Assets with fixed values, such as personal property and savings accounts, are also subject to equitable division.
To determine an equitable way to divide a marital estate, the court must determine the following facts about the couple and their assets:
- Each asset’s tax burden and how it would affect its new, single owner;
- Each partner’s age and health needs;
- Existing debts and liabilities against the couple’s assets;
- With certain assets, the asset’s projected future value; and
- Non-transferable assets like employee stock ownership plans (ESOPs). When this type of asset is present, a larger share of another may be given to the non-owner spouse to make up for its lack of transferability.
Other Issues to Consider with a Post-Retirement Divorce
When a couple divorces during their working years, alimony is generally awarded in a limited amount meant to help the lesser earning spouse avoid financial hardship as he or she prepares to reenter the workforce. With retired couples and couples who were married for decades, permanent alimony is far more common because it is rare that the lesser earning spouse can realistically reenter the workforce and become self-supporting.
Work with an Experienced Denver High Net Worth Divorce Attorney
If you are planning to end your marriage, work with an experienced Denver divorce lawyer who has worked with clients in your situation before. Not only are you near or at divorce age, you have substantial assets that need to be carefully considered and divided appropriately in your divorce. Contact our team at Nicholas Family Law today to schedule your initial consultation with us to learn more about the asset division process and other parts of your divorce.