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Figuring divorce into an estate plan

When most people think of estate planning, divorce is not a part of the picture. For most people, the estate planning phase is when they try to ensure that their spouse will get most of their assets. In some cases, however, it is necessary to try to keep the spouse from getting them. In Florida, as in other states, special care should be taken when divorce figures into an estate plan.

Before retirement accounts can be divided up in a divorce, both parties must make a tally of all of the money that they each have. A summary plan description will work for accounts that are employee-based, such as pension plans and 401(k)s. IRA balances, Roth balances, CDs, real estate, savings accounts, money market accounts and any other financial asset must be accounted for and valued. Once this has been taken care of, it can be determined how the assets will be divided.

Determining the value of these assets can be complicated. The proper paperwork must be filed, and extra taxes and fees will likely be incurred. The divorce decree has to clearly spell out exactly how the couple's assets will be divided, and each asset has its own way that it must be split. There are many other factors, such as Social Security, bank accounts and other investments to be considered for estate planning during a divorce.

Because of the complicated nature of the division of property during a divorce, it could be beneficial for anyone in Florida whose marriage is dissolving to speak with an estate planning lawyer. In such cases, it is not just important to have a divorce lawyer, but also to have someone on hand who can guide the client in how the division of retirement, savings accounts, Roth and IRA balances and other assets involved in an estate plan should be handled. An estate planning lawyer can help the client make sure that all of the proper paperwork is filed and everything is in order.

Source: fool.com, "How to Protect Your Retirement Savings During Divorce", Sarah Szczypinski, Sep. 2, 2017

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