In a Colorado divorce, a spouse often becomes emotionally distressed over why the marriage did not work out. This distress causes many divorcing spouses, particularly those who are 50 and older, to overlook the significant assets that can play a huge role in the outcome of property division. Couples in their 50s may have accumulated significant properties during their marriage, such as real estate, marital homes, bank accounts and business investments, which are all subject to division upon divorce. Besides these, retirement accounts and pension plans such as 401(k) or 403 (b) plans can also be included in the division of marital properties.
Unfortunately, many people are unaware that they can share in their spouse's retirement benefits. In fact, a survey conducted by Securian Financial Group found that 31 percent of divorcing spouses did not go after the retirement benefits of their ex-spouses and were not aware they could do so. The 546 people who participated in the survey had filed for divorce after 10 years or more of marriage.
Generally, any retirement assets that qualify as marital property can be divided between each party unless the plan was placed under the other spouse's name before the marriage. In equitable distribution states like Colorado, assets obtained during the marriage are generally subject to division, regardless of whether they were acquired by only one spouse.
When it comes to retirement assets, it may be best for Colorado spouses not to withdraw all the money from the other spouse's 401(k). Doing so may prevent the money from continuing to grow. It is often a good strategy to concentrate on pursuing one's share of the retirement account rather than the marital home or seeking alimony. Alimony is a short-term plan and taxable while the marital home is subject to mortgage expenses, repairs and maintenance costs. It's important to remember that any decision made during a divorce should be made on a rational rather than an emotional basis.
Source: Forbes, "The Big Money Mistake Divorcing Women Make," Kerry Hannon, July 3, 2014