Divorce may understandably be challenging emotionally, but it can also take a financial toll on an individual. This financial toll can be devastating for a person who is around the corner from his or her retirement years. Some tips may help people protect themselves financially while going through a divorce proceeding in New Jersey.
If two people are able to find common ground, they may want to negotiate their divorce or complete divorce mediation rather than litigating the divorce. This is because these alternatives to litigation give them the opportunity to reach a settlement that is mutually beneficial and less costly than going to trial. They may also make it easier for the two parties to communicate amicably with each other if necessary after the divorce is over.
It is also important to update one's beneficiaries on financial accounts, including on any retirement accounts. An ex-spouse probably will not be a person's beneficiary unless this is a requirement of the person's divorce settlement. If a person wants a child to be his or her account's primary beneficiary, he or she may want to create a revocable living trust for the child that will become the beneficiary of this account.
New Jersey is an equal distribution state when it comes to divorce. Thus, if the two divorcing individuals have to go to trial, the court will examine factors such as both parties' monetary situations, their ability to make money, and how long their marriage lasted to achieve a division of property that is fair to both individuals. Appropriate legal guidance may help divorcing individuals pursue the assets to which they believe they are entitled while still considering the other spouse's needs.
Source: Time, "Divorce: Who Gets Retirement Accounts?", AJ Smith, Nov. 16, 2015