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Retirement impact of high-asset divorce on Connecticut couples

For affluent couples who choose to divorce, particularly those over the age of 50, asset division may be far more complex than for a younger couple. In addition to the usual liquid or semi-liquid assets, including the contents of bank accounts, jewelry, art and real estate, retirement funds and portfolios must be included in the marital estate to ensure an equitable distribution of property.

In many cases, retirement funds such as pensions, IRAs and other retirement nest eggs are designed to be accessible by only the controlling account holder. This means that while one spouse may have a very tidy retirement fund laid away, the liquid assets may not be present to permit the spouse to buy out the other spouse's interest in the fund. In turn, this renders a truly equitable distribution of marital assets difficult or impossible without liquidating other assets.

Another potential problem is the question of how much "half" really is. It could pertain to the amount in the account as a whole or the portion that was invested and drew interest only since the date the marriage began. Also, divorcing may nullify any rights either partner has to survivor or beneficiary status on retirement accounts. For this reason, many older couples are engaging in collaborative divorce proceedings to protect their financial stability.

When an attorney begins a complex property division, a likely starting point is analyzing all the liquid and illiquid assets of the estate to determine whether the wherewithal to buy out one spouse or the other exists. The attorney may recommend a plan for dividing assets that both spouses would then review and agree upon. If a settlement cannot be achieved, the attorney may take the case to litigation.

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