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New York Family Law Blog

401(k) funds subject to division during divorce

The process of getting divorced can naturally be challenging for all parties from a financial standpoint. Specifically, divorcing individuals who have been planning for retirement may wonder what will happen to their savings as part of the divorce process. Here is a rundown on how retirement savings are handled during divorce in New York.

First, it is important for two divorcing parties to consider what they did before getting married. If the two parties created a prenuptial agreement, this agreement will dictate what happens to their retirement savings. Meanwhile, if the two parties did not create this type of agreement, and if one person has a 401(k), both individuals are entitled to portions of that person's 401(k).

Divorce financial planning can be beneficial

The rate at which people end their marriages has dropped over the past 40 years, going from about half to just under 40% now. Still, getting divorced sometimes cannot be avoided in situations where two people are unable to reconcile their differences. Divorce can unfortunately have negative financial impacts, but planning ahead may help to mitigate its effects in the short and long terms in New York.

Before starting the divorce process, soliciting the help of a financial planner may be a wise idea. That is because this type of planner may help those getting divorced to fully understand the types of assets and liabilities that have to be divided as part of the divorce process. Learning this information is especially important for the spouse who did not handle the family finances during the marriage. For instance, he or she did not handle bill payments, budget management or investing.

Is divorce in your future? How to tell

Many divorced people say that they knew their marriage was over before it happened. Others say that they had no idea it was coming. Whether you can see the signs or are totally blindsided, it can still be a devastating event, even if it's something both you and your spouse want.

However, if you could see into the future and know for certain whether you and your significant other would divorce, you might be able to better prepare yourself. Families all around New York might appreciate being able to get both financial and personal matters in order before divorce papers ever enter the picture. Though looking into a crystal ball isn't an option, experts say there are several signs that may indicate you're about to get a divorce.

Social Security benefits affected by divorce

Getting divorced can be a financially confusing experience no matter what stage of life two people in New York are in. However, it can be particularly challenging for individuals who are just years away from retiring. An understanding of how divorce and Social Security work may help these individuals to make wise decisions about their financial futures while going through the marital breakup process.

When people get divorced, they are eligible to get money from Social Security based on their ex-spouses' work records. Fortunately, their exes are not affected by the benefit amounts they receive. Those who have gotten divorced can receive 50% of their ex-spouses' full retirement amounts if they begin to get benefits at Social Security's full retirement age. Also, if their exes pass away first, they can get the benefit amounts that their exes would have gotten.

Tips can help with tackling emotional challenges of divorce

Getting divorced certainly presents financial challenges no matter what two spouses' income levels may be. However, the divorce process can also be difficult to handle on an emotional level. Here's a rundown on how individuals who are going through divorce can overcome the emotional challenges associated with process in New York.

For starters, it is paramount that those going through marital dissolution accept the fact that they are ending their marriages. Once they recognize this, they can focus fully on protecting their best interests as they work to finalize their divorces. Another smart move during divorce is to consult with a professional such as a therapist or even a life coach. These experts can help with processing the emotions brought about by divorce.

Sharing child custody can be a seamless process

Navigating divorce is no easy feat in New York, particularly when young children are involved. Why? Because the parents might initially agree with the idea of sharing custody of their children but may later find themselves at odds regarding the children's upbringing. Fortunately, some steps may make for a smoother joint child custody experience in the long term.

First, showing one another respect is a must for joint custody to work. If the parties bash each other and share their negative opinions of the other with the children, this can drive a wedge between the parents as well as between the parents and the children. The more respectful the two parties are, the less likely they are to have conflict.

Prenups may protect business owners in the event of divorce

A marital breakup can easily dismantle a person's finances in New York. Unfortunately, that also means that the business that he or she worked so hard to build can be negatively impacted by divorce. For this reason, it is a wise idea for business owners to create prenuptial agreements prior to walking down the aisle.

Research shows that more engaged couples have created prenups in past years to protect their financial interests long-term. Prenuptial agreements, or prenups, are contracts that spell out what two soon-to-be spouses' separate assets are before they are married. If they happen to get divorced in the future, they will not have to worry about splitting this separate property. In addition, they can include in their prenups how they would like to address their debts if they happen to break up.

A gray divorce and your financial future

A divorce is difficult and complicated at any stage of life, but it can be especially complicated when a person is approaching retirement age. There are many complex financial factors to address, especially when one or both parties plan on not working at some point in the near future. Without careful planning and a fair divorce order, a gray divorce, which is a divorce involving two people age 50 or up, can be devastating.

If you are heading for a gray divorce, you may be wondering what you can do to secure your financial future. You will want to be intentional about seeking terms that allow you to have stability into your golden years. There is a lot on the line for you and your long-term interests, but you do not have to walk through this difficult process alone.

Some common reasons couples head for divorce

Marriages end for many different reasons. But New York couples who find themselves headed for divorce may find they have some things in common with each other when walking down the path toward ending their marriages. Experts suggest that there are some common reasons couples end up divorcing. If these issues aren't rectified, they can fester and ultimately partners may find themselves discussing separation or divorce. 

It seems that infidelity is a leading cause of divorce as is a lack of communication. Extramarital affairs lead the way in the cause of divorce, but when a couple doesn't communicate openly about the issues they may be having, it may cause one or both to stray in a marriage. If couples are faithful to each other, but are having financial difficulties, their relationship may be strained and that could ultimately lead to the parting of ways. 

Mediation offers multiple benefits during divorce

Navigating the dissolution of a marriage can seem like a harrowing process. In addition to dealing with the division of marital property, two spouses who are getting a divorce must tackle complex matters like alimony and, if there are kids involved, custody and child support. Fortunately, these issues can potentially be resolved without the parties ever having to step foot in a New York courtroom.

More people who are getting divorced are turning to an approach referred to as alternative dispute resolution (ADR) instead of litigating the issues in court. ADR, such as mediation or a collaborative divorce, is in demand today because it is typically more flexible than litigation. It is also less expensive and usually saves time.

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