Divorce can be tricky, especially for retirees in Tennessee. They may no longer work but may have substantial savings, real estate and stock brokerage accounts.
Understanding the nuances of asset division during divorce is important for these seniors.
Retirement savings
Retirees often rely on accumulated savings to fund their golden years. When facing divorce, they should evaluate retirement accounts, such as 401(k)s and IRAs.
Tennessee follows equitable distribution principles, meaning the fair but not necessarily equal division of assets acquired during the marriage. It is necessary to have a clear understanding of the value of these accounts and consider potential tax implications when dividing them.
Real estate holdings
For many retirees, real estate is a significant part of their asset portfolio. Whether it is the marital home, vacation property or rental units, determining how to divide real estate is a major aspect of the divorce process.
Retirees should carefully assess the market value of their properties (the median value of a home in Knoxville is $184,200). The parties should decide whether selling, buying out the other party or opting for a property swap aligns with their financial goals and circumstances.
Stock brokerage accounts
Stocks, bonds and other investments in brokerage accounts are common assets among retirees. During divorce, the parties should identify and value these assets accurately.
Understanding the tax implications and potential capital gains is important when considering how to distribute these holdings. Explore the option of a Qualified Domestic Relations Order (QDRO) for retirement accounts to ensure compliance with legal requirements.
Social Security benefits
While Social Security benefits are not divisible in divorce proceedings, there could be an effect. For example, divorced seniors may be eligible for spousal benefits based on their ex-spouse’s earnings record, provided the marriage lasted at least 10 years and the claimant remains unmarried.
Divorcing retirees in Tennessee face unique challenges as they navigate the complexities of asset division. However, they can make informed decisions that align with their financial well-being in this new chapter of their lives.
