On behalf of Cooper & Tanis, P.C. posted in high asset divorce on Tuesday, September 13, 2016.

Baby boomers are aging, and as they do so in Colorado and throughout the country, they are also divorcing at higher rates than previous generations. People older than 50 were twice as likely to divorce in 2014 than people that age in 1990, and those over 65 were three times more likely. As a result, a major concern in some divorce cases has become protecting retirement accounts. Older adults do not have decades ahead of them to recover from a financially ruinous divorce.

People should keep in mind that the retirement account will usually be considered marital property even if only one person was contributing to it. Over a lifetime, a maxed-out retirement account could reach a worth near $1 million. This is one reason it is important that a spouse does not trade the house for their share of the retirement account without realizing its worth. They should also keep in mind that the house will come with certain expenses.

The worth of a retirement account should be calculated based on whether or not the contributions were taxed. The beneficiaries of most retirement accounts are taxed when they receive distributions, although Roth accounts are funded out of post-tax income and thus distributions are tax-free. If spouses are in different tax brackets, this could affect how much they ultimately receive.

In a high-asset divorce, both individuals might be concerned about how property division will work out and what they will be able to keep. In some cases, it might work for an individual to exchange one asset for another. The situation may become more complex if there are businesses or out-of-state real estate involved. Couples who are in this type of situation may want to have the assistance of their respective attorneys in negotiating a comprehensive settlement agreement that addresses these issues.