When going through divorce in Pennsylvania, it is natural to want to rush through the process and move on with life. However, rushing can lead to the neglecting of critical steps, which may have major financial consequences. A few tips may help both men and women to protect themselves financially during and following a divorce proceeding involving property division.
First, regarding the division of property, it is essential to have properly drafted documents for transferring retirement assets. If the documents are not written appropriately, the transfer will not be free from taxation. If pension plans are involved, it is essential to pay close attention to all of the details regarding how the asset splits are executed, as different plans have different regulations.
It is also important to update a power of attorney and a will after completing the divorce process. Changing beneficiary designations on insurance policies, IRAs and 401(k)s is another important yet often-forgotten step. After all, whoever is listed on these documents will be the ones who end up getting these assets down the road, not who is designated on the will.
Going through divorce in Pennsylvania can be tough due to both the emotional and the financial aspects of this type of family law proceeding. However, it may be possible for both parties to reach a mutually beneficial resolution through processes such as divorce negotiation or mediation, which can be less costly and less stressful than litigation. If they are unable to work toward a settlement amicably, then a judge will end up deciding how property division will be handled in their case.
Source: wtop.com, “Be mindful of divorce’s financial consequences“, Dawn Doebler, March 8, 2017