On behalf of Stange Law Firm, PC posted in divorce on Wednesday, November 6, 2019.
While the divorce rate in Oklahoma and around the nation is on the decline, it is actually increasing among couples aged 55 and older. As these couples are nearer to retirement age, the issue of retirement and finances becomes a crucial consideration when contemplating divorce. It is certainly more important than for a younger couple who may have many earning years ahead of them.
A late-life divorce can have a significant impact on a couple’s retirement plans should they decide to divorce. Maintaining two households is more expensive than maintaining one. Retirement accounts are typically considered marital property unless there is an existing prenuptial agreement that specifies otherwise. If the funds are subject to division that can result in the possible need to work longer to help make up the difference.
When dividing retirement accounts, it makes sense to do so in a way that will cost as little as possible. While most retirement accounts will incur a penalty due to early withdrawal, this can be avoided through the use of a domestic relations order, or DRO (often referred to as a QDRO — qualified domestic relations order). Once a QDRO is in place, funds can be allocated without incurring any penalties or other early withdrawal charges such as taxes. The funds will then become available to the individuals as they would have prior to the divorce.
A person contemplating divorce in Oklahoma may pause when considering the financial implications of retirement. While it is true that divorce can have an impact on one’s plans, careful planning can alleviate some of those losses. A knowledgeable family law attorney can assist in such areas as establishing a QDRO and helping a person to arrive at an equitable settlement that helps to preserve each person’s retirement funds.