After a divorce, Missouri residents may want to change beneficiary designations on their accounts. It can be easy to forget to make this change, and the result can be an ex-spouse inheriting a person’s assets instead of whoever the person intended to have them.
There are a number of other steps people should also take to protect their finances in a divorce. In some families, one person is largely in charge of the financial side of things. If this is the case, the other person needs to find out what assets they own and obtain any other relevant financial information. People should also be aware that decisions they make about selling or splitting assets during a divorce can have additional complications. For example, securities can be sold, but there will be a capital gains tax on them. There could be penalties for leaving annuities early.
Retirement accounts come with their own set of complexities. To divide a 401(k) or 403(b) plan, it is necessary to have a document known as a qualified domestic relations order. Dividing an IRA without taxes or penalties requires a divorce decree and new IRAs to roll the distributions into. Legal and financial professionals may be able to help with some of the issues around dividing assets.
This process does not have to mean going to court. Couples can often negotiate an agreement for property division, if necessary, without litigation. Attorneys can assist in this process. This can allow couples the flexibility to make more creative arrangements. For example, instead of going through the process of getting a QDRO to divide a 401(k), a couple might agree instead that one person will keep that asset while the other takes an asset of equal value.