When older people in Minnesota get a divorce, their focus may be more on dividing retirement savings and other elements related to property division compared to younger couples who might be concerned about child custody. People should be aware that there are a number of specific rules for dividing these types of assets. Annuities can pose particular complexities, and some people may agree for one to keep the annuity and the other to take another asset since cashing it out can lead to a significant drop in value.
There are also rules around splitting 401(k)s, pensions and IRAs. For the former two, it is necessary to get a document called a qualified domestic relations order. This allows a tax break because of the divorce, and rolling the money into an IRA also means no penalties will be due. A distribution from an IRA can also be rolled into another IRA without taxes or penalties. There may be additional rules associated with pension plans.
It may also take time to get an accurate value for the pension plan. When people are looking at the value of assets, it is important to note whether there will be taxes on withdrawals that bring down the overall value.
There may be additional financial concerns people should take into account during the process of property division. If one person earns significantly more than the other, that person may have more time to rebuild retirement savings. Therefore, the lower-earning spouse might take a more significant portion of those savings. One person may want to keep the home for sentimental reasons, but if the children are grown, it may be impractical and costly for a single person and the couple may want to consider selling it.