It is believed that an estimated 40 to 50 percent of marriages end in divorce, and the number for adults over the age of 50 has doubled. California being a community property state can make property division complicated and costly. In some cases, assets take precedence. Reports have shown that the only thing more devastating than divorce for couples over 50 is the death of a spouse.
While it may seem relatively easy to divide assets in half, it is not, especially for people later in life. Sentimental value and personal attachment make it hard to assign a dollar value. Annuity accounts, income tax, health care coverage and Social Security are valid concerns that should be addressed.
For some couples, annuities can be a large portion of their future retirement earnings, and dividing or making changes to these annuities during a divorce settlement may have long-term financial consequences. Key elements to consider may be who is paying the premium, who holds ownership and who is the beneficiary. These will come into play during property division. Some disputes may only be settled by surrendering or selling. Either way, the fees could be staggering.
Divorce and property division can be as devastating on a person as the loss of a loved one. Because of the potential for tax penalties and surrender charges in California, it may be beneficial for the individual to seek the advice of a property division attorney. A knowledgeable attorney can help determine the steps they need to take in order to make this life-changing transition easier.
Source: www.annuity.org, “Annuity & Divorce Laws: Dividing, Transfers & Other Complications”, Alanna Ritchie, Sept.1,2017