How do I best protect myself in our high-asset divorce?

When you have significant assets heading into an unfortunate divorce situation in Michigan, you certainly want to make sure you are taking all the right steps to protect your own interests. There are also things you want to avoid doing that can be just as important as what you act on.

Fidelity advises on several considerations that you will want to review when it comes to what not to do.

Do not forget to consider withdrawal of some retirement funds

For instance, if you are getting a piece of your ex-spouse’s retirement account, you may want to avoid rolling over its entirety into your IRA. This is particularly so if you need some of that money to pay expenses related to your divorce itself.

It is true that your QDRO may allow you to make a withdrawal from the ex-spouse’s account without being liable for the 10 percent penalty. This is so even if you are younger than the standard 59.5 years of age. You will owe income taxes, if applicable, however. That said, it is a great option if you have no other savings or way to pay those unavoidable divorce expenses.

Do not split retirement funds informally without official procedures

Additionally, you cannot just split the retirement accounts yourself in any unofficial manner without likely remorse. You want to make sure you have court orders and other necessary documents in order because if you do not, there is a good chance you will find yourself taxed on moneys you otherwise would not have been.

Do not forget health insurance coverage

Do not neglect your health or your medical coverage. Make sure to review your medical insurance situation. If your coverage is through your ex-spouse’s employer provided coverage, divorce can mean the event that triggers the end of your coverage as spouse. You may be in for major regrets if you do not make a priority out of planning and acting to keep yourself healthy and covered.

Do not forget your tax professional

Lastly, how divorce issues come out in the wash can have a great impact on your taxable income going forward, separately from the tax issues with retirement plans noted above. You will want professional advise with regard to every changing tax issue, as may pertain to many areas, including spousal support payments, child support, etc.

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