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Retirement accounts require special attention during divorce

Getting through a marital split-up as quickly as possible is understandably the goal of many couples going through this type of family law proceeding. However, rushing through a divorce proceeding in Montana increases one's chances of making costly errors. One area that requires special thought involves retirement accounts.

First, changing beneficiary designations on retirement accounts is essential. Even if a brand-new will has been drawn up as a result of the divorce, the beneficiary designation on a retirement account still needs to be changed as well. This step is often neglected because people erroneously think that their wills supersede all of their other documentation. However, the opposite is actually true.

Beneficiary designations are considered legally binding documents. Regardless of what is in one of the divorced parties' wills when he or she dies, if the deceased party's ex-spouse is still named a beneficiary on his or her account, the ex-spouse will get the money in that account. The ex-spouse may choose to give the money to the deceased party's children instead in an effort to honor the will, but this could still lead to complicated tax consequences.

Going through divorce in Montana can be overwhelming from a financial standpoint, especially for those with a significant number of assets. However, an attorney can help with navigating even the most complex of divorce proceedings. With proper guidance, it is possible to fight for one's fair share of assets and make informed financial decisions that will be personally beneficial in the long run.

Source: forbes.com, "5 Retirement Moves For Recently Divorced Couples", Marilyn Timbers, April 27, 2017

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