When a person chooses to file for divorce, chances are they want to get through the legal process as quickly as possible so they can pursue a fresh start. While this is only natural, given that most divorces occur when two people grow apart, it is important for divorcing spouses to carefully consider all factors of the divorce process to ensure they take the necessary steps towards protecting their futures. Failure to do so can lead a person to suffer financially for the remainder of their life.
One common error that some divorcing spouses make is deciding to split retirement funds by a specific dollar amount. While this may seem like a wise method to protect your future, doing so can leave you in a financial rut after the divorce is finalized. How?
Because the economy is constantly fluctuating, the value of the dollar is never set. Of course, this is due to inflation. So then, when a couple decides to divide a retirement account by a specific dollar amount, one spouse can end up receiving far less of the funds than the other. Below is an example.
Bob and Sue decide to file for divorce. Together, the two of them have a retirement account worth $100,000.00. When the two decide to divorce, they agree that Sue will take $50,000. Then, the economy fluctuates greatly and now the value of a dollar is only half of what it was worth before. Now, the account is actually only valued at $50,000.00. So, Sue walks away with the entire retirement account, and Bob is left without any funds from the account.
While this is only an example, such situations may occur if divorcing spouses are not careful. To avoid such problems and other serious issues, individuals contemplating divorce should seek experienced legal representation right away. A skilled lawyer can ensure a person’s rights and future are protected.
If you are contemplating divorce and would like to ensure your rights are protected, get in touch with our divorce lawyers today. We can stand by your side from start to finish.