Divorce can adversely impact retirement funds

Ending a marriage in Kentucky is a challenging process with many issues to consider. It is therefore not unusual for people in the throes of a divorce to forget to think how their retirements will be affected. Even if a person is not close to retirement age, the existing funds in the retirement account may have to be shared between the two spouses, leaving a considerably reduced amount in savings.

Kentucky is an equitable distribution state in which assets must be divided in a way that is fair in the eyes of the court. For this purpose, the court will consider factors such as the length of the marriage, the health of both spouses, their ages, their earning ability, and more. Child support and alimony may also be taken into account. A divorcing spouse will likely have to cope with a single income, which would jeopardize his or her chances of making up the retirement savings lost in the property division process.

If the couple had a prenuptial agreement in place in which the percentages of funds to be allocated to each spouse were specified, the retirement fund might be protected. This may also be addressed in a post-nuptial agreement. However, if no such agreement exists, the only option might be to negotiate a compromise to benefit both parties.

Regardless of whether an agreement is in place, there is no guarantee that one spouse can get maximum benefit from his or her retirement account. The most appropriate step might be to secure the services of an experienced Kentucky divorce attorney who can explore the possible options and suggest the most appropriate way to deal with retirement funds. A lawyer can look at all the aspects of the divorce and work on a strategy that might lead to post-divorce financial stability.

Source: host.madison.com, "Can Divorce Destroy Your Retirement?", Wendy Connick, Accessed on Oct. 27, 2017

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