Due to the oil industry, Texas has a reputation for having lots of wealthy residents. However, that wealth can mean a downturn in couples' financial positions should they decide to divorce.
Divorced couples have about 30 percent less net worth than those who stay married. Divvying up assets like retirement accounts can cause problems down the road for the account holders because they may not have enough time to rebuild the accounts before they retire. If both parties have roughly the same amount of money in their retirement accounts, they may decide not to touch the accounts.
In can be costly, however, in high asset divorces, where one spouse has substantially more money than the other. If the wealthy spouse must give up, say, $250,000 of his or her 401(k) funds, replacing that money probably won't be easy as there are restrictions on how much money a person can contribute each year. For example, an individual can contribute a maximum of $18,500 annually, $24,500 if he or she is over the age of 50. If that same amount of money comes from an IRA or Roth account, contributions are limited to $5,500 annually.
Dividing up property in a divorce can be complicated for couples of any financial means. However, in high-asset divorces, the stakes are a lot higher as wealthy individuals have a lot more to lose. The wealthier spouse may wish to consult with not only a divorce lawyer but also a financial planner. Working together, both professionals may be able to make suggestions to their client on how to minimize the financial losses and help him or her begin the process of rebuilding his or her financial future.