Divorce proceedings can be complex, especially when it comes to dividing assets. In Wisconsin, like in many states, retirement accounts often escape the spotlight.
These accounts can harbor substantial financial value, making it important for individuals to be aware of and address this hidden wealth.
Stealthy nature
About 46% of U.S. households report some retirement savings. However, retirement accounts, such as 401(k)s and IRAs, are easy to overlook.
Many couples may not realize the significant financial implications these accounts carry. With the focus often on tangible assets such as homes and vehicles, the value of retirement funds can slip through the cracks. This can leave one spouse at a potential disadvantage.
Importance
Retirement accounts accumulate over time, representing years of hard work and financial planning. In the context of divorce, these assets can be subject to division, and their hidden nature can affect the equitable distribution of marital property. Failing to account for retirement funds can lead to an uneven financial outcome for both parties.
Steps
To address this hidden asset, take proactive measures. Start by obtaining complete financial disclosure from both parties. This includes thorough documentation of all existing retirement accounts, contributions and any potential employer-sponsored plans.
Next, consider consulting a financial expert to assess the true value of these accounts. Considerations include the tax implications, penalties for early withdrawal and potential growth of these assets. Ensure that the overall asset division includes the accurate valuation of retirement accounts.
A comprehensive approach to financial disclosure and analysis contributes to an equitable resolution for the parties’ financial futures post-divorce.
