Many residents of the greater Denver area have a lot of wealth tied up in their retirement plans. While even happily married couples should understand how their 401(k) plans or pensions work, those going through a divorce or legal separation in Colorado in particular need to pay attention to such issues.
Like other property and accounts, retirement plans can be considered marital property subject to division. There may, however, be some exceptions to this rule. For instance, if a person accumulated wealth in her retirement plan for several years prior to marriage, then she may be able to argue that the wealth she earned before marriage should be hers outright in the event of a divorce or separation. Likewise, money accumulated after the divorce or separation process commencing can also be set aside.
Oftentimes, setting aside this sort of wealth involves some math as well as some legal work.
Furthermore, putting a value on some retirement plans, especially pensions, can be a complicated process. This is because evaluating the pension will involve translating a future monthly payout in to the present value of a lump sum that can be divided immediately. The calculation depends on a number of factors. To add further complexities to the mix, the value of a good pension can run in to the millions of dollars.
A person who is going through a divorce or separation and who happens to be lucky enough to be drawing a pension has a lot to lose. Moreover, there are a number of legal and financial issues, as well as certain tax consequences, that he will have to address. Seeking the advice or an experienced family law attorney may be an important step.