Divorce is something that no one ever plans on doing but circumstances happen, people grow apart and sometimes it is the only way to get back a sense of happiness and restart a new chapter of your lives. Splitting up items or bank accounts can be tough to do in a divorce; even figuring out child custody can turn into a very sticky situation. Retirement assets in a divorce can be considered one of the largest assets to deal with and are associated with tax deferred assets which include profit sharing plans, pension plans, IRA’s and even 401K plans. When it comes to division of retirement plans in a divorce in the state of Colorado, the laws and rules in the court system are quite complex and elaborate. If the retirement assets turn out to be marital property such as small businesses owned and operated by the couple, then usually half of the equity and revenue belongs to each spouse equally. The problem with some of these retirement plans is that they do not allow for a 50-50 split to occur, so making sure that everything is lined up properly before you go to court to settle the divorce is very important.
When it comes to a divorce in Colorado using a Qualified Domestic Relations Order of QDRO is crucial in dividing retirement assets and to collect child support or maintenance. In some cases, if this is not done properly, income tax and penalties must be paid to the spouse or partner who technically owned the retirement asset before it is divided by the court system. Basically using a QDRO is to avoid any tax problems that you may come across in the process of a divorce in Colorado. Because many companies are eliminating retirement plans and pension plans for their employees, it is important for many people to take half of what their spouse has in an effort to stay ahead financially. One spouse may not have the plans needed to survive so the division of retirement plans equally in a divorce in Colorado could be important for at least one party of the marriage. Obviously divorce is hard enough to go through but when you have financial issues to deal with in the midst of it all, it gets even tougher.